The largest number of people ever charged with securities fraud, including mob figures and top officers of a popular chain restaurant, were arrested on Wednesday for sprawling schemes centred on organised crime's infiltration of Wall Street.
U.S. federal authorities said 120 people, including a vice chairman and the chief executive officer of the Ranch-1 fast food chain, were charged for their alleged roles in nationwide stock fraud schemes that caused losses of more than $50 million. The allegations include racketeering, extortion, money laundering, illegal kickbacks, securities fraud and witness tampering. The Securities and Exchange Commission also filed related civil suits alleging a variety of frauds in the market for low-priced securities. As part of the probe, it suspended trading in securities of ePawn.com Inc. which is allegedly controlled by a convicted felon. It also suspended trading in Wamex Holdings Inc. As recently as Wednesday Wamex posted an Internet video on Yahoo.com advertising an alternative trading system to be launched on July 4. The SEC alleged it had not authorised the system.
Wamex's chief executive and chief administrative officers were also named in one of the related criminal complaints alleging they were involved in a conspiracy to commit securities fraud that included making false representations to the SEC. "The company never engaged in any illegal activity and it has no relationship with the mob," said Sascha Mundstein, chief operating officer.
Prosecutors said the criminal cases marked the largest number of people ever arrested at one time on securities fraud related charges and one of the largest number ever arrested on a criminal case of any kind. At least 98 people had been arrested by noon in New York, Connecticut, Pennsylvania, Maryland, Virginia, Georgia, Florida, Texas, Illinois, Utah and California. Manhattan U.S. Attorney Mary Jo White said the arrests are the biggest dent authorities have made so far in efforts to stop the presence of organised crime on Wall Street. Members and associates of all five New York area crime families were named in the charges. Reuters
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