[IWAR] MARKETS organized crime

From: Michael Wilson (MWILSON/0005514706at_private)
Date: Wed Nov 26 1997 - 16:40:29 PST

  • Next message: Michael Wilson: "[IWAR] BURMA Opium lord"

                       HealthTech CEO iss "shocked" by allegations
          Copyright ) 1997 Nando.net
          Copyright ) 1997 Reuters
       LOS ANGELES (November 26, 1997 6:47 p.m. EST http://www.nando.net) - The
       chief executive officer of HealthTech International Inc. said Wednesday
       he was "shocked" by allegations he and the company's stock were involved
       in an alleged stock manipulation scheme involving mob figures.
       CEO Gordon Hall told Reuters he was released Tuesday on his own
       recognizance after being arrested in Arizona on charges of racketeering
       and securities fraud.
       "I had no idea of their (mob) involvement whatsoever in small-cap stocks
       or the stock market," Hall said. "I'm as shocked as anyone else."
       Bruce Ohr, an assistant U.S. attorney in New York, said Hall and 18
       other men charged with duping investors in an alleged scheme spanning
       seven states would be arraigned in New York federal court next week.
       Defendants charged with racketeering face up to 40 years in prison, if
       Authorities said the Bonanno and Genovese crime families allegedly
       bribed brokers at Meyers Pollock Robbins Inc., a Wall Street firm, to
       tout the stock of HealthTech to the public.
       The indictment said the two crime families made a pact with Hall to
       artificially inflate his firm's stock, allowing them to make millions of
       dollars in profits.
       Thirteen of the defendants were arrested and arraigned in Manhattan. The
       others were arrested in Arizona, including Hall, Florida and Texas. Hall
       and a former company executive were released on their own recognizance.
       "I'm not involved in any extortion or such. All we did was hire N.A.
       Promotional Services and Equity Consulting Group and paid them in the
       stock and options, which is a totally conventional way for small-cap
       companies to pay for promotional services or public relations," Hall
       The indictment says Eugene Lombardo, one of the defendants in the case,
       was president of N.A. Promotional Services. It alleges that Lombardo was
       an associate of Frank Lino, an alleged captain in the Bonanno family,
       who made an agreement with Hall to inflate the stock.
       Hall said he had met with certain individuals of N.A., but said the
       agreement ended last May.
       "We clearly didn't do any business since May 1997 because the agreement
       was expired," Hall said.
       The 97-page indictment includes charges of racketeering, securities and
       wire fraud, extortion and bank fraud, according to prosecutors who
       estimated the defendants profited in excess of $1.3 million and caused
       investors to lose at least $3 million.
       Mary Jo White, the U.S. attorney in New York, told a news conference
       Tuesday the charges stem from a yearlong investigation by White's
       office, the FBI, the Securities and Exchange Commission, the National
       Association of Securities Dealers-Regulations and the New York Police
       White said alleged crime figures used "threats, extortion and violence
       as part of the scheme to manipulate stock." One of the alleged
       extortions was a threat to knife members of Hall's family if he did not
       increase payments to them, White said.
       Hall declined to comment Wednesday when asked about the alleged threats
       to his life.
       Trading in shares of HealthTech was suspended by the SEC on Nov. 17,
       pending a probe into the adequacy and accuracy of the company's public
       information regarding acquisitions.
       The SEC disclosed Tuesday that it had sued HealthTech, alleging that
       HealthTech had overstated its assets by as much as 80 percent in
       financial reports dating back to March 1996.
       Hall said Wednesday that that case had been settled and that HealthTech
       had agreed to restate financial statements for 1995, 1996 and the first
       three quarters of 1997 and to correct any materially false and
       misleading information publicly available.
       Hall said the company does not currently have a public relations firm
       and the board is currently reviewing and analyzing all its options.

    This archive was generated by hypermail 2b30 : Fri Apr 13 2001 - 12:54:15 PDT