Convicted Securities Fraudster Sentenced To 3 1/2 – 10 1/2 Years In Prison Plus Restitution
(Long Island, NY) Attorney General Eric T. Schneiderman today secured a jail sentence of 3 1/2 to 10 1/2 years for convicted securities fraudster Charles Raspa, whose scheme defrauded 800 victims out of more than $6.2 million in unlawful commissions, in violation of New York law. The sentence was handed down by Justice Marcy Kahn in State Supreme Court in Manhattan.
Raspa was previously found guilty of 28 felony counts, including Enterprise Corruption, Grand Larceny, Scheme to Defraud under the Martin Act, and Criminal Possession of Stolen Property, among other crimes. In addition to his prison sentence, Raspa was ordered to pay $253,169 in restitution to his victims.
“The lifeblood of our financial markets is trust,” Attorney General Schneiderman said. “Today’s sentence proves that those who undermine public trust in the integrity of our markets by breaking the law and cheating investors will be held accountable.”
Raspa headed the New Jersey Office of the now defunct securities firm Joseph Stevens & Company, Inc. and was a minority owner of the firm. An investigation begun by the New York County District Attorney’s Office and taken over for trial by the Attorney General revealed that Raspa and 16 co-defendants ran the firm as a criminal enterprise from January 2001 through December 2005.
Joseph Stevens, whose main office was located on Maiden Lane in Manhattan, specialized in marketing small cap, bio-tech stocks. Stocks were recommended to defrauded customers principally on the basis of the brokers’ ability to earn additional undisclosed compensation, rather than because of the quality of the investment. In many cases, the stocks the customers purchased on defendants’ recommendations lost significant value in the days and months following the transactions.
The defendants repeatedly worked to collect undisclosed compensation while trading stocks, often by manipulating the stock price higher after having pre-arranged orders from their customers. The brokers subsequently convinced their customers to buy the stock but would hold the customer orders until the price of the stock had increased, often because of the trader’s manipulation of the stock through small, repeated purchases. The trader then executed orders at inflated prices, so that all customers were charged the highest price. The trader, the broker, and the firm shared the extra money generated as a result of the manipulation and overcharging among themselves.
Raspa and his co-defendants defrauded 800 victims in more than 5,000 trades valued at $151,286,804.44, which generated more than $6.2 million in unlawful commissions, in violation of New York law.
In addition to the New Jersey office, the firm also operated branch offices on Long Island and Staten Island.
Charles Raspa is the last of 16 individuals associated with Joseph Stevens & Company, Inc. to face justice. The two owners of Joseph Stevens, Joseph Sorbara and Steven Markowitz, three traders, Craig Shapiro, John Moraitis, and Massimo Martinucci, and ten brokers, Peter Orthos, Alan Ferraro, Scott Tierney, John Micciola, Steven Scarcella, Michael Tripodi, Douglas Costabile, James Rathgeber, Matthew Menies, and Hajradin Mucovic, as well as the corporation Joseph Stevens & Co., Inc., all pleaded guilty before trial.
Special Assistant Attorneys General Elson Ho, Judith Weinstock, and Michael Kitsis tried the case under the supervision of Nancy Hoppock, Executive Deputy Attorney General for Criminal Justice. They were assisted by Trial Preparation Assistants Gil Thompson and Kyle Rodrigues, and Investigator Gregory Dunlavey. Special Assistant Attorney General Madeleine Guilmain has been in charge of the parallel civil Asset Forfeiture case. Attorney General Schneiderman thanked Steven Vitulano, Terrence Bohan, and Dawn Libal of the United States Securities and Exchange Commission, Thomas Carocci of the Criminal Prosecution Assistance Group of the Financial Industry Regulatory Authority (FINRA), Special Agent Jonathan Savel of the United States Department of Homeland Security, and former paralegal Christopher Miller for their assistance.