Mob's Bully Market: Probers hear taped threat
By GREG B. SMITH
NY Daily News Staff Writer
The tape — of a promoter threatening to kill a reluctant participant in a multimillion-dollar stock scam — was the highlight of the House finance subcommittee hearing on La Cosa Nostra's spreading Wall Street influence.
"I said, 'Do yourself a favor. I'm on my way to Arizona,'" promoter Claudio Iodice warned in the secretly recorded call. "Keep yourself out of the office, because if I even see you, you're [expletive] getting hit."
Members of the subcommittee grilled the FBI, the Securities and Exchange Commission and regulators from the National Association of Securities Dealers on the need for new methods to wage the latest version of the war against the mob.
As pols sat in silence, the FBI played a June 1997 tape of Iodice talking with Eugene Lombardo, a reputed associate of the Bonanno crime family who was running a big-money pump-and-dump scheme.
Iodice was enraged at the CEO of an Arizona firm who was trying to back out.
"I'm going to Arizona to his family's house," Iodice threatened.
"Unbelievable," replied Lombardo. "When do you want to go?"
Iodice still faces charges, while Lombardo has pleaded guilty to securities fraud and is serving an eight-year sentence. Their case is one of nine major mob-on-Wall-Street cases brought in the past three years.
Thomas Fuentes, chief of the FBI's organized crime unit, said law enforcement is particularly worried about the mob's recent use of Internet Web sites and e-mail to hype the stock of dubious and sometimes bogus companies.
Noting that gangsters typically target loosely regulated over-the-counter microcap stocks, regulators cited several new ways to crack down on the mob, including:
Tightening up reporting requirements for companies that trade in the microcap market.
Requiring firms that hire a certain percentage of brokers from houses with disciplinary records to tape-record all of their brokers' sales pitches.
Original Publication Date: 9/14/00
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