USDOJ Steps in « Thread Started on Jan 22, 2006, 12:04am »
UNITED STATES DISTRICT COURTDISTRICT OF NEW JERSEY
18 U.S.C. §§ 371, 1343, & 2
UNITED STATES OF AMERICA
v
TONINO LABELLA, :a/k/a “Tony”:ROBERT MONTANI, VINCENT LANGELLA, and MICHAEL GARBO:I N D I C T M E N T
The Grand Jury in and for the District of New Jersey,sitting in Newark, charges:COUNT ONE(Conspiracy to Commit Securities Fraudand Wire Fraud)Relevant Entities1. At all times relevant to this Indictment: a. Bryn Mawr Investment Group, Inc., also known asValley Forge Securities, Inc. (“BMIG/VFS”), was a securitiesbroker-dealer that offered a variety of brokerage services tocustomers throughout the United States. BMIG/VFS had itsheadquarters at 919 Conestoga Road, Rosemont, Pennsylvania. Atvarious times relevant to this Indictment, BMIG/VFS operated thefollowing additional offices:i. During the period from in or around September1999 to in or around January 2001, BMIG/VFS operated an office -------------------------------------------------------------------------------- Page 2 -2-located at 114 McClean Avenue, Staten Island, New York (the“Staten Island office”).ii. During the period from in or around August1999 to in or around May 2000, BMIG/VFS operated an officelocated at 110 Williams Street, New York (the “Williams Streetoffice”).iii. During the period from in or around January2001 to in or around December 2001, BMIG/VFS operated an officelocated at 125 Maiden Lane, New York, New York (the “Maiden Laneoffice”).iv. During the period from in or around January2001 to in or around December 2001, BMIG/VFS operated an officelocated at 719 E. Las Olas Boulevard, Ft. Lauderdale, Florida(the “Ft. Lauderdale office”).b. Lloyds Bahamas Securities, Ltd. was a Bahamianentity. c. Briar Creek Investments was an entity controlled bydefendant TONINO LABELLA, a/k/a “Tony.”d. Eagletech Communications, Inc. (“Eagletech”) was apublicly-traded communications technology company.e. Select Media Communications, Inc. (“SMTV”) was apublicly-traded entertainment company.f. Schroder & Co. was a clearing broker for theBMIG/VFS offices from in and around August 1999 to in and around -------------------------------------------------------------------------------- Page 3 -3-June 2001. In turn, Schroder & Co. cleared through LEWCO,located in Jersey City, New Jersey. g. Bank of New York Clearing, also known as Pershing,located in Jersey City, New Jersey, was a clearing broker for allBMIG/VFS offices from in and around June 2001 to in or aroundDecember 2001. h. Ledenhall Bank & Trust Company, Ltd. was a banklocated in Nassau, Bahamas that issued Axxess InternationalATM/credit cards.The Defendants2. At all times relevant to this Indictment, unlessotherwise indicated herein:a. Defendant TONINO LABELLA, a/k/a “Tony,” was theChief Executive Officer of BMIG/VFS. Defendant LABELLA was alsothe beneficial owner of Lloyds Bahamas Securities Ltd. and BriarCreek Investments.b. Defendant ROBERT MONTANI was the complianceofficer, operations manager, and a broker employed at theheadquarters of BMIG/VFS in Rosemont, Pennsylvania.c. Defendant VINCENT LANGELLA was a broker at theBMIG/VFS Staten Island office.d. Defendant MICHAEL GARBO was a broker at theBMIG/VFS Staten Island and Maiden Lane offices. -------------------------------------------------------------------------------- Page 4 -4-Certain Co-conspirators3. At all times relevant to this Indictment, unlessotherwise indicated:a. “J.S.,” who is named as a co-conspirator but not asa defendant herein, was a stock promoter.b. “T.K.,” who is named as a co-conspirator but notas a defendant herein, was the Managing Director of LloydsBahamas Securities, Inc. under the direction of defendantLABELLA. c. “J.C.,” who is named as a co-conspirator but notas a defendant herein, was the compliance officer and co-managedthe BMIG/VFS Staten Island office from in or around September1999 to in or around December 2000.d. “A.R.,” who is named as a co-conspirator but notas a defendant herein, was a broker and co-managed the BMIG/VFS Staten Island office during the period from in or aroundSeptember 1999 to in or around December 2000.e. “F.P.,” who is named as a co-conspirator but notas a defendant herein, co-managed and recruited brokers to workat the BMIG/VFS Staten Island office during the period from in oraround September 1999 to in or around June 2000.f. “A.K.,” who is named as a co-conspirator but notas a defendant herein, was a broker and succeeded co-conspiratorsA.R. and J.C. as a co-manager of the BMIG/VFS Staten Island -------------------------------------------------------------------------------- Page 5 -5-office during the period from in or around April 2000 to in oraround January 2001, and was the co-manager of the BMIG/VFS Maiden Lane office during the period from in on around January2001 to in or around August 2001. g. “J.F.,” who is named as a co-conspirator but notas a defendant herein, was a broker and succeeded co-conspiratorsA.R. and J.C. as a co-manager of the BMIG/VFS Staten Islandoffice during the period from April 2000 to January 2001 and wasthe co-manager of the BMIG/VFS Maiden Lane office during theperiod from in or around January 2001 to in or around August2001.h. “D.L.,” who is named as a co-conspirator but not asa defendant herein, was an unlicensed broker employed at theStaten Island and Maiden Lane offices of BMIG/VFS. i. “J.D.,” who is named as a co-conspirator but notas a defendant herein, was a broker employed at the Staten Islandand Maiden Lane offices of BMIG/VFS. j. “R.H.,” who is named as a co-conspirator but notas a defendant herein, was an unlicensed broker employed at theStaten Island and Maiden Lane offices of BMIG/VFS. k. “C.N.,” who is named as a co-conspirator but notas a defendant herein, was a broker employed at the Staten Islandand Maiden Lane offices of BMIG/VFS. l. “A.V.,” who is named as a co-conspirator but not as -------------------------------------------------------------------------------- Page 6 -6-a defendant herein, was a broker at the headquarters of BMIG/VFSlocated in Rosemont, Pennsylvania. m. “A.C.,” who is named as a co-conspirator but notas a defendant herein, was a broker employed at the BMIG/VFS Ft.Lauderdale office.n. “F.B.,” who is named as a co-conspirator but notas a defendant herein, was a broker employed at the BMIG/VFS Ft.Lauderdale office. The Conspiracy4. From in or around August 1999 to in or around December2001, in the District of New Jersey, and elsewhere, defendantsTONINO LABELLA, a/k/a “Tony,”ROBERT MONTANI,VINCENT LANGELLA, andMICHAEL GARBOdid knowingly and willfully conspire and agree with each otherand others to commit offenses against the United States, that is:a. by use of the means and instrumentalities ofinterstate commerce, the mails, and facilities of nationalsecurities exchanges, directly and indirectly, to knowinglyand willfully use manipulative and deceptive devices andcontrivances in contravention of Title 17, Code of FederalRegulations, Section 240.10b-5 (Rule “10b-5") in connectionwith the purchase and sale of Eagletech stock and SMTV stockby (i) employing devices, schemes, and artifices to defraud -------------------------------------------------------------------------------- Page 7 -7-members of the investing public; (ii) making untruestatements of material facts and omitting to state materialfacts necessary in order to make the statements made, in thelight of the circumstances under which they were made, notmisleading; and (iii) engaging in acts, practices, and acourse of business which operated and would operate as afraud and deceit upon purchasers of Eagletech stock and SMTVstock and other members of the investing public, contrary toTitle 15, United States Code, Sections 78j(b) and 78ff(a)and Rule 10b-5; andb. to devise a scheme and artifice to defraudpurchasers of Eagletech stock and SMTV stock and othermembers of the investing public, and to obtain money andproperty by means of materially false and fraudulentpretenses, representations and promises, and to useinterstate wire communications for the purpose of executingsuch scheme and artifice, contrary to Title 18, UnitedStates Code, Section 1343.Objects of the Conspiracy5. It was an object of the conspiracy for defendant LABELLAand co-conspirator J.S. to acquire control of a large portion ofthe available shares of Eagletech and SMTV while concealing theirownership and control of the shares from the investing public.6. It was a further object of the conspiracy to -------------------------------------------------------------------------------- Page 8 -8-offer BMIG/VFS brokers excessive, undisclosed commissions or “kickbacks” for selling shares of Eagletech and SMTV tomembers of the investing public, in order to artificiallyincrease the price of Eagletech stock and SMTV stock and toprofit from the manipulation of the prices of those stocks.Means and Methods of the Conspiracy7. Among the means and methods employed by the defendantsand their co-conspirators to carry out the conspiracy and effectits unlawful objects were those set forth in Paragraphs 8 through48 below.The Manipulation of Eagletech Stock8. In and around April 1999, co-conspirator J.S. anddefendant LABELLA agreed to assist the founder of EagletechCommunications, in raising capital. 9. To finance the capital investment in Eagletech,defendant LABELLA, defendant MONTANI, and co-conspirator A.V.raised more than one million dollars from private investors. Initially, however, defendants LABELLA and MONTANI and co-conspirator A.V. only purported to sell the private investorsshares of Eagletech. At the time of these alleged sales, noshares of Eagletech were actually transferred to the privateinvestors’ brokerage accounts. 10. At the direction of defendants LABELLA and MONTANI, co-conspirator T.K. sent letters from Lloyds Bahamas Securities, -------------------------------------------------------------------------------- Page 9 -9-Inc., to the private investors confirming their purchases ofshares of Eagletech at prices ranging from $1.00 to $2.00 pershare. 11. Defendant LABELLA paid defendant MONTANI and co-conspirator A.V. approximately 25% commissions on these privatesham sales. Defendant MONTANI and co-conspirator A.V. did notdisclose the value of their commissions to their privateinvestors. Defendant MONTANI earned approximately $82,125 andco-conspirator A.V. earned approximately $317,487 in commissionson the private sales. 12. In exchange for financing, and at the direction of co-conspirator J.S. and defendant LABELLA, Eagletech issuedapproximately 10 million shares of common stock. None of theseshares were issued to the private investors. Instead, the shareswere issued to co-conspirator J.S., defendant LABELLA, and theirnominees. These shares were acquired by co-conspirator J.S. anddefendant LABELLA for approximately 36 cents per share.13. In addition, co-conspirator J.S. and defendant LABELLArequired Eagletech to execute a series of “reverse stock splits”which had the effect of reducing the number of outstanding sharesof Eagletech stock and increasing the percentage of Eagletechstock controlled by co-conspirator J.S. and defendant LABELLA. As a result, defendant LABELLA and co-conspirator J.S. controlledover 90% of the outstanding shares of Eagletech stock. -------------------------------------------------------------------------------- Page 10 -10-14. Defendant LABELLA and co-conspirator J.S., with co-conspirator T.K.’s assistance, transferred the Eagletech sharesheld by them and their nominees to entities controlled bydefendant LABELLA. Specifically, from in and around August 1999to in and around December 2000, defendant LABELLA transferredapproximately 1,828,647 shares of Eagletech into variousbrokerage accounts at BMIG/VFS that he controlled, including anaccount in the name of Lloyds Bahamas Securities. 15. As to the private investors, defendants LABELLA andMONTANI and co-conspirators A.V. and T.K. purported to liquidatemost of each private investor’s Eagletech holdings by informingthe private investors that BMIG/VFS had sold their Eagletechshares on their behalf for a small return. In reality, defendantLABELLA was holding the majority of the Eagletech shares inbrokerage accounts he controlled, and profiting from the sales ofthese shares to the public. 16. To stimulate the sales of Eagletech stock to theinvesting public, defendant LABELLA offered brokers in thevarious BMIG/VFS offices commissions ranging from approximately30% to approximately 50% on the sales of Eagletech stock toBMIG/VFS customers. 17. Defendant MONTANI sold more than 60,000 shares ofEagletech stock to his own BMIG/VFS retail customers in exchangefor excessive commissions, or kickbacks, which he did not -------------------------------------------------------------------------------- Page 11 -11-disclose to his customers. 18. In and around September 1999, defendant LABELLA metwith co-conspirators A.R., J.C., and F.P., who at the timecollectively co-managed the BMIG/VFS Staten Island office. Atthis meeting, defendant LABELLA described to co-conspiratorsA.R., J.C., and F.P. a kickback scheme wherein he would pay theStaten Island office $3 for each share of Eagletech stock sold byits brokers. At this time, Eagletech was selling forapproximately $6 per share on the Over-The-Counter Bulletin Boardmarket. Pursuant to defendant LABELLA’s kickback scheme, onedollar of the $3/share kickback was paid to the broker who soldthe Eagletech shares and the remaining two dollars was paid toco-conspirators J.C., A.R. and F.P.19. Co-conspirators J.C., A.R, and F.P. agreed toparticipate in the broker-kickback scheme and relayed the schemeto certain brokers in the Staten Island office, includingdefendants VINCENT LANGELLA and MICHAEL GARBO.20. Defendant VINCENT LANGELLA sold over 16,000 shares ofEagletech stock to BMIG/VFS customers in exchange for excessivecommission kickbacks that he failed to disclose to his customers. In addition, defendant LANGELLA conducted unauthorized trades ofEagletech stock in customers’ brokerage accounts and permittedother unregistered, unlicensed brokers to use his name orrepresentative number to sell Eagletech stock to BMIG/VFS -------------------------------------------------------------------------------- Page 12 -12-customers in furtherance of the conspiracy. 21. Defendant MICHAEL GARBO sold over 60,000 shares ofEagletech stock to BMIG/VFS customers in exchange for excessivecommission kickbacks that he failed to disclose to his customers. In addition, defendant GARBO permitted other unregistered,unlicensed brokers to use his name or representative number tosell Eagletech stock to BMIG/VFS customers in furtherance of theconspiracy. 22. The broker-conspirators employed at the Staten Islandoffice used deceptive practices in furtherance of the Eagletechstock manipulation scheme, including exaggerating the projectedappreciation of Eagletech stock, buying shares of Eagletech stockwithout customer approval, refusing BMIG/VFS customers’ requeststo sell Eagletech stock, and executing sales of Eagletech sharesfrom customers’ accounts only when the shares could be “crossed”with shares purchased by other customers. 23. The conspirators at the Staten Island Office used orcaused the use of various instrumentalities of interstatecommerce, including the following: telephonic solicitations ofcustomers; facsimile transmissions of documents or “tickets”reflecting trades of Eagletech stock to the BMIG/VFS headquartersin Rosemont, Pennsylvania; and electronic communicationsregarding Eagletech trades sent by headquarters staff viacomputer to clearing firms, including clearing firms located in -------------------------------------------------------------------------------- Page 13 -13-New Jersey, and thereafter to a national securities exchange.24. Co-conspirator J.C. and others periodically faxedtallies of the Eagletech shares sold by the brokers in the StatenIsland office to defendant MONTANI at the Rosemont headquartersfor the purpose of obtaining kickback payments from defendantLABELLA. Defendant MONTANI forwarded the information he receivedregarding Eagletech sales to co-conspirator T.K., defendantLABELLA and others in order to facilitate the payment ofkickbacks to the brokers. In addition, defendant MONTANIdirected the “crossing” of purchases and sales of Eagletechshares among BMIG/VFS customer accounts.25. Defendant LABELLA paid kickbacks to J.C., A.R., F.P.and other brokers in the Staten Island office for the sales ofEagletech stock through various means, including checks issuedfrom Briar Creek Investments and through wire transfers of funds. 26. From in and around August 1999 to in and aroundDecember 2000, the conspirators sold Eagletech stock to membersof the investing public at prices ranging from 70 cents per shareto approximately $14 per share. Defendant LABELLA and otherconspirators earned approximately $12 million from the sale ofEagletech stock. -------------------------------------------------------------------------------- Page 14 -14-The Manipulation of SMTV Stock27. In and around October 1999, defendant LABELLA and co-conspirator J.S. commenced a stock-manipulation scheme involvingthe stock of another publicly-traded company, Select MediaCommunications (“SMTV”). Defendant LABELLA and co-conspiratorJ.S. caused SMTV to issue 4.5 million unregistered shares ofcommon stock to defendant LABELLA, co-conspirator J.S. and theirnominees in exchange for $1,000,000. In addition, defendantLABELLA and co-conspirator J.S. directed SMTV to execute a“reverse stock split,” which caused the number of outstandingshares of SMTV to decrease. The result was that defendantLABELLA and co-conspirator J.S. controlled over 90% of theavailable shares of SMTV stock.28. During the period from in and around January 2000 to inand around December 2001, defendant LABELLA and co-conspiratorJ.S. caused the transfer of approximately 1,421,805 shares ofSMTV from their nominees to brokerage accounts controlled bydefendant LABELLA. Defendant LABELLA then directed that SMTVshares from these accounts be sold to members of the investingpublic. As with the manipulation of Eagletech stock, defendantLABELLA offered BMIG/VFS brokers excessive commissions valued atapproximately 50% of the total proceeds of the sales of SMTVstock. 29. Defendant MONTANI sold over 200,000 shares of SMTV -------------------------------------------------------------------------------- Page 15 -15-stock to BMIG/VFS customers in exchange for undisclosed,excessive commissions. In addition, defendant MONTANI directedthe crossing of customer trades of SMTV stock and facilitated thepayment of broker kickbacks as described above in connection withthe scheme to manipulate Eagletech stock.30. In and around January 2000, defendant LABELLA met withco-conspirators A.R., J.C., and F.P. and offered to pay co-conspirators J.C., A.R., and F.P. and the brokers in the StatenIsland office the 50% commission on the sale of SMTV stock. Aswith the manipulation of Eagletech stock, co-conspirators J.C.,A.R., and F.P. accepted defendant LABELLA’s proposal and relayedthe offer to certain brokers in the Staten Island office,including defendants LANGELLA and GARBO. 31. Defendant LANGELLA sold over 50,000 shares of SMTVstock to BMIG/VFS customers in exchange for undisclosed,excessive commissions and allowed other unregistered, unlicensedbrokers to use his name or representative number to sell sharesof SMTV to BMIG/VFS customers in furtherance of the conspiracy. 32. Defendant GARBO sold over 58,000 shares of SMTV stockto BMIG/VFS customers in exchange for undisclosed, excessivecommissions and allowed unregistered, unlicensed brokers to usehis name or representative number to sell shares of SMTV toBMIG/VFS customers in furtherance of the conspiracy. 33. In addition, in and around August 1999, co-conspirator --------------------------------------------------------------------------------
Re: USDOJ Takes Action « Reply #1 on Jan 22, 2006, 12:04am »
Page 16 -16-F.P., defendant GARBO and others, opened the BMIG Williams Streetoffice. Co-conspirator F.P., defendant GARBO and otherscontinued to perpetrate the Eagletech and SMTV manipulationsdescribed herein at the Williams Street office until in andaround May 2000.34. As with the manipulation of Eagletech stock, theconspirator-brokers used deceptive sales tactics to sell SMTVstock to BMIG/VFS customers, including exaggerating the projectedappreciation of SMTV stock, buying shares of SMTV stock withoutcustomer approval, refusing to sell SMTV stock upon the requestsof the customers, and executing the sale of shares of SMTV from acustomers account only when the shares could be crossed withshares being purchased by another customer. In addition, as withthe manipulation of Eagletech stock, the conspirators used orcaused the use of various instrumentalities of interstatecommerce as set forth above in Paragraph 23 in connection withthe scheme to manipulate Eagletech stock.35. Defendant LABELLA paid kickbacks to J.C., A.R., F.P.and other broker-conspirators for the sales of SMTV stock throughvarious means, including checks issued from Briar CreekInvestments and through wires transfers. 36. During the period from March 2000 through in and aroundDecember 2001, defendant LABELLA and others earned approximately$4 million from the sale of SMTV stock to members of the -------------------------------------------------------------------------------- Page 17 -17-investing public.The Use of Bahamian Axxess International Cards37. In and around February 2000, during the perpetration ofthe schemes to manipulate Eagletech and SMTV stocks, defendantLABELLA met with co-conspirators J.C., A.R., and F.P. andinformed them, in substance, that they were to begin using AxxessInternational ATM/credit cards that would be linked to Bahamianbank accounts. Defendant LABELLA further stated that he wouldcause all future kickback payments to be deposited into theseoff-shore accounts and that the conspirators were to withdraw orobtain the funds through the Axxess ATM cards. Defendant LABELLAfurther stated that the use of the cards would reduce their“paper trail” and would enable the conspirators to avoid thepayment of income taxes on the income they derived from theAxxess cards.38. Thereafter, at the direction of defendant LABELLA andwith the assistance of co-conspirator T.K., defendant MONTANI,co-conspirators J.C., A.R., F.P., A.K., J.F. and others obtainedAxxess cards issued by Ledenhall Bank and Trust Company, Ltd., inNassau, Bahamas.39. Thereafter, defendant MONTANI and other conspiratorscontacted co-conspirator T.K. and informed him of the amounts ofmoney to be applied to their Axxess accounts as payment for -------------------------------------------------------------------------------- Page 18 -18-kickbacks. Co-conspirator T.K. then obtained authorization fromdefendant LABELLA to apply the requested amounts to the specifiedAxxess accounts, and caused the appropriate amounts to be appliedto the conspirators’ Axxess accounts.40. On numerous occasions, co-conspirators J.C., A.R.,F.P., A.K., and J.F. withdrew cash using their Axxess cards andused these funds to pay kickbacks to the broker-conspirators andthemselves. In addition, defendant LABELLA and MONTANI usedAxxess cards issued to them to obtain the proceeds of the stockscheme. Change in Management of Staten Island BMIG/VFS Office41. In or around June 2000, co-conspirator F.P. left theBMIB/VFS Staten Island office. Co-conspirators A.R. and J.C.continued to run the Staten Island office until in or aroundApril 2000. At that time, co-conspirators A.K. and J.F. tookover the management of the Staten Island BMIG/VFS office. Defendant LABELLA caused Axxess cards to be issued to A.K. andJ.F. Co-conspirators A.K. and J.F. hired additional licensed andunlicensed brokers to work at the Staten Island Office, includingco-conspirators D.L., R.H., J.D., and C.N.42. Defendant LABELLA continued to pay kickbacks to the co-conspirators, including co-conspirators A.K. and J.F. Inaddition, co-conspirators A.K. and J.F. used Axxess cards toobtain funds to pay kickbacks to the brokers under their -------------------------------------------------------------------------------- Page 19 -19-supervision, including D.L., R.H., J.D. and C.N., for the sale ofEagletech and SMTV stock to BMIG/VFS customers. 43. In and around January 2001, co-conspirators A.K. andJ.F. and the brokers under their supervision moved their officesand established the BMIG/VFS Maiden Lane office. DefendantsLABELLA and MONTANI, acting together with co-conspirators A.K.,J.F. and others, continued to carry out the broker-kickbackscheme at the Maiden Lane office until in and around September2001 when the Maiden Lane BMIG/VFS office closed.44. Defendant MONTANI continued to monitor the sales ofshares of Eagletech and SMTV by A.K., J.F., and other brokers atthe Staten Island and Maiden Lane offices. Defendant MONTANIcontinued to direct the crossing of customer trades andfacilitate the payment of broker kickbacks as described above. The Florida BMIG/VFS Office45. In and around the end of 2000, defendant LABELLA andco-conspirator J.S. established the BMIG/VFS Ft. Lauderdaleoffice, where they employed co-conspirator F.B. as a broker.46. In and around February 2001, Defendant LABELLA and co-conspirator J.S. recruited co-conspirator A.C. to join the Ft.Lauderdale BMIG/VFS office. Defendant LABELLA offered and paidco-conspirator A.C. kickbacks in exchange for selling SMTV stockto BMIG/VFS customers. 47. During the period from in and around February 2001 to -------------------------------------------------------------------------------- Page 20 -20-in and around December 2001, co-conspirator A.C. sold over140,000 shares of SMTV stock to BMIG/VFS customers in exchangefor excessive commission kickbacks which he failed to disclose tohis customers. 48. From late 2000 to in and around December 2001, co-conspirator F.B. sold over 170,000 shares of SMTV to BMIG/VFScustomers in exchange for excessive commission kickbacks hefailed to disclose to his customers. -------------------------------------------------------------------------------- Page 21 -21-Overt Acts49. In furtherance of the conspiracy and in order to effectthe objects thereof, the defendants and their co-conspiratorscommitted the following overt acts in the District of New Jerseyand elsewhere:a. On or about January 13, 2000, defendant GARBO, or amember of the conspiracy using GARBO’s representative number withGARBO’s consent, sold 6,100 shares of Eagletech stock to acustomer herein referred to as “Customer K.L.” for $41,279.b. On a date in and around February 2000, defendantLANGELLA or a member of the conspiracy using LANGELLA’s name andrepresentative number with his consent, sold 2500 shares of SMTVstock to a customer herein referred to as “Customer J.M.” for$14,000. c. On or about February 1, 2000, defendant LANGELLA,or a member of the conspiracy using LANGELLA’S representativenumber with LANGELLA’S consent, sold 5,750 shares of Eagletechstock to a customer herein referred to as “Customer S.F.” for$39,455.d. On or about July 25, 2000, defendant MONTANI sold500 shares of Eagletech to a customer herein referred to as“Customer J.S.” for $18,741.50.e. In or around August 2000, defendant MONTANI spokeon the telephone with a BMIG/VFS customer in Barrington, New -------------------------------------------------------------------------------- Page 22 -22-Jersey herein referred to as “Customer P.V.” and refused CustomerP.V.’s request to sell his shares of SMTV.f. In or around May 2001, defendant LABELLA went withco-conspirator A.C. to a strip club located in New Jersey nearRoutes 1 & 9, where the two discussed A.C. joining the BMIG/VFSFt. Lauderdale office and earning kickbacks from the sale of SMTVstock.g. On or about May 12, 2001, in Atlantic City, NewJersey, co-conspirator J.F. used his Axxess International card toobtain approximately $23,000 representing the proceeds of thestock scheme charged herein.All in violation of Title 18, United States Code, Section371. -------------------------------------------------------------------------------- Page 23 -23-COUNT TWO(Wire Fraud)1. Paragraphs 1 through 3 and 5 through 49 of Count One ofthis Indictment are realleged as if set forth in full herein.2. In or around August 2000, in the District of New Jersey,and elsewhere, defendantsTONINO LABELLA, a/k/a “Tony”andROBERT MONTANIdid knowingly and willfully devise a scheme and artifice todefraud and to obtain money by means of false and fraudulentpretenses, representations and promises as set forth in theincorporated paragraphs of Count One, and for the purpose ofexecuting such scheme and artifice, transmitted and caused to betransmitted by means of wire communication in interstatecommerce, writings, signs, and signals, that is, a telephone callbetween defendant MONTANI and BMIG/VFS Customer P.V. ofBarrington, New Jersey, wherein defendant MONTANI refusedCustomer P.V.’s request to sell shares of SMTV held by CustomerP.V.In violation of Title 18, United States Code, Sections 1343and 2. -------------------------------------------------------------------------------- Page 24 -24-COUNT THREE(Wire Fraud)1. Paragraphs 1 through 3 and 5 through 49 of Count One ofthis Indictment are realleged as if set forth in full herein.2. In or around February 2000, in the District of NewJersey, and elsewhere, defendantsTONINO LABELLA, a/k/a “Tony”andVINCENT LANGELLAdid knowingly and willfully devise a scheme and artifice todefraud and to obtain money by means of false and fraudulentpretenses, representations and promises as set forth in theincorporated paragraphs of Count One, and for the purpose ofexecuting such scheme and artifice, transmitted and caused to betransmitted by means of wire communication in interstatecommerce, writings, signs, and signals, that is, a telephone callbetween defendant LANGELLA and a BMIG/VFS customer hereinreferred to as “Customer J.M.” of Laurence Harbor, New Jersey,wherein defendant LANGELLA solicited Customer J.M. to buy 2,500shares of SMTV. In violation of Title 18, United States Code, Sections 1343and 2. -------------------------------------------------------------------------------- Page 25 -25-COUNT FOUR(Wire Fraud)1. Paragraphs 1 through 3 and 5 through 49 of Count One ofthis Indictment are realleged as if set forth in full herein.2. On or about May 12, 2001, in the District of New Jersey,and elsewhere, defendantTONINO LABELLA,a/k/a “Tony”did knowingly and willfully devise a scheme and artifice todefraud and to obtain money by means of false and fraudulentpretenses, representations and promises as set forth in theincorporated paragraphs of Count One, and for the purpose ofexecuting such scheme and artifice, transmitted and caused to betransmitted by means of wire communication in interstatecommerce, writings, signs, and signals, that is, the electronictransfer of approximately $23,000 to co-conspirator J.F. viaJ.F.’s Axxess International card. In violation of Title 18, United States Code, Sections 1343and 2. -------------------------------------------------------------------------------- Page 26 -26-COUNT FIVE(Conspiracy to Impair and Impede the Internal Revenue Service)1. Paragraphs 1 through 3 and 5 though 49 of Count One ofthis Indictment are realleged as if set forth in full herein.2. During 2000, co-conspirators J.C. and A.R. wereprincipals in a corporation known as the R.C.P. Group, which theyused to operate the Staten Island BMIG/VFS office. 3. During 2000 and 2001, co-conspirators A.K. and J.F. wereprincipals in a corporation known as the J.A. Group, which theyused to operate the Staten Island and Maiden Lane BMIG/VFSoffices. 4. From in and around March 1999 to in and around December2001, in the District of New Jersey and elsewhere, defendantTONINO LABELLA,a/k/a “Tony,”did knowingly and willfully conspire and agree with co-conspirators J.S., J.C., A.R., F.P., A.K., J.F. and others todefraud the United States by impeding, impairing, obstructing anddefeating the lawful governmental functions of the InternalRevenue Service of the Treasury Department to ascertain, compute,assess, and collect income taxes.Object of the Conspiracy5. It was the object of the conspiracy for the conspiratorsto obtain income from the use of Axxess International creditcards and conceal this income from the Internal Revenue Service. -------------------------------------------------------------------------------- Page 27 -27-Means and Methods of the Conspiracy6. Among the means and methods employed by defendantLABELLA and his co-conspirators to carry out the conspiracy andeffect its unlawful object were those set forth in Paragraphs 7through 16 below.7. As described in the incorporated paragraphs of CountOne, defendant LABELLA directed certain co-conspirators,including J.S., J.C., A.R., and A.K., to use Axxess InternationalATM/credit cards to obtain the proceeds of the stock manipulationscheme set forth in Count One. 8. In and around March 1999, defendant LABELLA stated insubstance to co-conspirator J.S. that J.S. could obtain proceedsof their stock manipulation through the use of an Axxess card andthat J.S. would not have to pay taxes on that income. 9. In and around February of 2000, defendant LABELLA statedin substance to co-conspirators J.C., A.R. and others that theuse of the Axxess cards would enable the conspirators to avoidpayment of income taxes on the income they derived from theAxxess cards.10. Defendant LABELLA personally used Axxess Internationalcredit cards to obtain proceeds of the stock manipulation schemeand caused Axxess cards to be issued to co-conspirators J.S.,J.C., A.R., and A.K., all of whom derived income from the use ofthe cards. -------------------------------------------------------------------------------- Page 28 -28-11. Co-conspirator J.S. failed to disclose and report theincome he received through his Axxess International credit cardon his personal tax return for the year 1999.12. Co-conspirators J.C. and A.R. failed to disclose andreport the income they received through their AxxessInternational cards on the corporate tax return for the R.C.P.Group and on their individual income tax returns for the year2000.13. Co-conspirators A.K. and J.F. failed to disclose andreport the income they received through their AxxessInternational credit card on the corporate tax returns for theJ.A. Group for the years 2000 and 2001. In addition, co-conspirator A.K. failed to disclose and report the income hereceived through his Axxess International credit card on hispersonal returns for 2000 and 2001.14. As a result of the conspirators’ failure to discloseand report the income they received through the use of theirAxxess International credit cards, the conspirators’ tax returnssubstantially understated their income.15. The income the co-conspirators failed to report onpersonal and business returns for the years 1999, 2000 and 2001exceeded $400,000. -------------------------------------------------------------------------------- Page 29 -29-Overt Acts16. In furtherance of the conspiracy and in order to effectthe object thereof, defendant LABELLA and his co-conspiratorscommitted the following overt acts in the District of New Jerseyand elsewhere:a. In or around February 2000, during the perpetrationof the scheme set forth in the incorporated paragraphs of CountOne, defendant LABELLA met with co-conspirators J.C., A.R., andF.P. in Staten Island and informed them, in substance, that theywere to use Axxess International ATM/credit cards linked to off-shore bank accounts to obtain money for kickback payments tobrokers.b. On or about February 3, 2001, in Atlantic City, NewJersey, co-conspirator A.K. obtained $8,160, representingundisclosed income, by using his Axxess International card.In violation of Title 18, United States Code, Section 371. -------------------------------------------------------------------------------- Page 30 -30-FORFEITURE ALLEGATION1. Upon conviction of one or more of the offenses allegedin Counts One, Two, Three and Four of this Indictment, defendantsTONINO LABELLA, a/k/a “Tony,” ROBERT MONTANI, VINCENT LANGELLA, and MICHAEL GARBO shall forfeit to the United States pursuant to18 U.S.C. Section 981(a)(1)(C) and 28 U.S.C. Section 2461(c) anyproperty constituting or derived from proceeds obtained directlyor indirectly as a result of the said violations, including butnot limited to the following:a. MONEY JUDGMENT: A sum equal to $16,000,000 inUnited States currency, representing the amount of proceedsobtained as a result of the offense(s) set forth in Counts One,Two, Three and Four for which the defendants are jointly andseverally liable.2. If the above-described forfeitable property, as a resultof any act or omissions of the defendant(s):a. cannot be located upon the exercise of duediligence;b. has been transferred or sold to, or depositedwith, a third person;c. has been placed beyond the jurisdiction of theCourt; d. has been substantially diminished in value; ore.has been commingled with other property which -------------------------------------------------------------------------------- Page 31 -31-cannot be subdivided without difficulty;it is the intent of the United States, pursuant to 21 U.S.C.section 853(p) as incorporated by 28 U.S.C. Section 2461(c), toseek forfeiture of any other property of said defendants up tothe value of the forfeitable property described above inparagraph 1(a). A TRUE BILLFOREPERSONCHRISTOPHER J. CHRISTIEUNITED STATES ATTORNEY
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