Update (June 15)-- The Utah man charged in Wednesday's massive stock fraud bust appeared in federal court in Salt Lake City on Thursday. Attorney's for Allen Wolfson asked the judge to release Wolfson on his own recognizance. The judge denied the request, and set bond at $500,000. Wolfson returns to court next week, when he's likely to be extradited to New York to face the eight felony counts against him.
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June 14, 2000
It's being called the biggest securities fraud crackdown in U.S. history.
Federal prosecutors today charge 120 people, including members of all five organized crime families in New York, in what they call a massive stock fraud scheme.
One of those indicted, Allen Z. Wolfson, lives in Salt Lake City. He appeared in federal court this morning on six counts of securities fraud and two counts of wire fraud.
The scheme allegedly ran for five years, and resulted in losses of $50-million.
Prosecutors say the Internet was sometimes used to promote stocks, and companies were falsely touted as Internet or "dot.com" companies to induce investors to invest.
Nationwide, the defendants include brokers, investment advisers, insiders of several companies and a former New York City police detective. They are being charged with everything from racketeering and extortion to solicitation for murder.
Wolfson has been a Utah resident off and on over the past several years. He was convicted in Florida in 1978 for securities and bank fraud. He is a well-known promoter, who started the Utah company CyberAmerica. Wolfson is not allowed to play a direct role in the company because of the prior conviction. His nephew now runs the CyberAmerica, which is in good standing with no complaints filed against it, according to the Utah Division of Securities.
Investigators believe the mob has been drawn to Wall Street by the promise of easy money represented by skyrocketing stocks.
More Information:
Details From AP
Government Complaint Against Wolfson
Tips For Safe Online Investing
Links:
U.S. Securities and Exchange Commission
Utah Division of Securities
Investing Online Resource Center
