THE MAFIA AND WALL STREET
In January 1997 the Department
of Justice and the Securities and Exchange Commission announced
the arrest of forty five individuals on charges of stock fraud,
manipulation of stock prices, and paying either cash or stock
to induce customers to purchase these inflated stocks. Since
that time, the Department of Justice has arrested many more individuals
involved in stock scams.
I, Edward Manfredonia, was the
progenitor of these investigations. The precipitating element
in these investigations was when I informed FBI Agent Joseph
Yastremski that Al Avasso had earned twenty three million dollars
in the stock scam, Greyhound Electronics, and that this money
had been laundered by Heinz Grein in Luxembourg. Heinz Grein
was involved in the insider trading scandal, Motel 6, and has
pleaded guilty to insider trading. (Note 1)
The stock, PNF, was introduced
by Wellmont Securities. The principals of Wellmont Securities
were George Wellington and Sam Gottfried, both former AMEX members
and friends of Al Avasso. At the time of the stock fraud, PNF,
Wellmont Securities was an AMEX member firm with offices on the
fifteenth floor of Two Rector Street. (Note 2) The offices of
Wellmont Securities were in space leased by Wagner Stott Clearing
Corporation, a subsidiary of Merrill Lynch. (Wagner Stott is
now named Merrill Lynch Professional Clearing.)
I, Edward Manfredonia, cleared
my trades as an AMEX member and trader through Wagner Stott.
I utilized the offices of Wagner Stott as did other members of
the American Stock Exchange who cleared through Wagner Stott.
Both Frost and Sullivan and Greenwald Securities were AMEX member
firms which cleared their trades through Wagner Stott. Jeff Green
was an independent AMEX member who qualified Greenwald Securities
for AMEX membership. Green cleared his trades through Wagner
Stott. Jeff Green pleaded guilty to charges of insider trading.
It was at this time that Al
Avasso utilized the offices of Wellmont Securities to initiate
PNF. I stated to both Al Sedita and Ralph Rao, the officers of
Wagner Stott who were in charge of this office and both of whom
knew that Al Avasso was a convicted felon and that he possessed
a permanent ban from membership at the AMEX, that Avasso should
not be permitted to utilize the offices of Wagner Stott. I further
informed these individuals that Avasso had stated to me that
he was going to introduce another stock scam. I was told by Al
Sedita and Ralph Rao that Avasso was a customer of Wellmont Securities
and that, as a customer of Wellmont Securities, he (Avasso) could
utilize the offices of Wagner Stott.
It was in these offices that
Avasso planned the stock fraud, PNF, by merging the minor telephone
leasing company Port-a-Fone with No Fire. Avasso was selling
warrants to individuals with whom he had participated in Greyhound
Electronics. (Warrants to purchase stock at $6 were sold by Avasso
at 100 warrants for an eighth of a dollar each.) Avasso boasted
on the telephone to his friends that they would each make as
much money in PNF as they did in Greyhound Electronics.
It was at this time, April 1991,
that Avasso had offered to provide financial backing for me so
that I could establish another company to trade on the AMEX.
Avasso informed me that he had engaged in extensive financial
dealings with Robert VanCaneghan and Louis Miceli, governors
of the AMEX; with other AMEX members; and, with senior compliance
officials employed by the American Stock Exchange.
Avasso boasted to me that his
father in law was a capo in the Mafia. Avasso further informed
me that he had paid off a postal inspector to assist him in his
business dealings. After confiding in me concerning his plans,
Avasso was upset that I did not respond favorably.
When Avasso informed me that
he had engaged in business dealings with Louis Miceli, I informed
Avasso that Miceli had arranged for him to receive a permanent
ban from the AMEX. Avasso exploded and, in the presence of Sam
Gottfried, demanded that I point out Miceli on his way from the
Battery Park Garage to the American Stock Exchange to several
associates who would have guns. Avasso informed me that one of
these individuals would be a postal inspector. I declined and
Avasso continued to demand that I perform this function whenever
he saw me. I declined and Avasso persisted.
To prove that he had influence
at the AMEX, Avasso informed me that he had paid off AMEX members
and AMEX employees in Compliance so that he would receive a light
punishment. (Avasso informed me that Steven Lister, Senior Vice
President of Compliance had invested in one of his partnerships
and had received a handsome dividend. This was confirmed by an
Assistant United States Attorney. Note 3)
I had informed Steven Lister
on three separate occasions that Avasso was involved in another
stock fraud. The first occasion was in January 1992, when in
the presence of Phillip Axelrod and Suzanne Johnson, two AMEX
attorneys in Compliance, that Avasso had informed me that he
would introduce another stock scam like Greyhound and that his
friends would make a lot of money. The second occasion was in
February 1992. The third occasion was in May 1992, after PNF
had been listed.
When I first informed Lister
in January 1992 concerning Avasso's latest scam, Lister informed
me that he knew that Avasso had been involved in another stock
and that steps had been taken to block off Avasso. Lister willfully
and knowingly permitted the listing of PNF on the AMEX.
I have since been informed by
Jonathan Frey, the partner of Joel Lovett, the Vice Chairman
of the AMEX, and by Stanley Katz who shares an office with Biddle
Worthington, a governor of the AMEX, during the debacle of PNF,
that the governors of the AMEX, knowingly, had permitted the
stock fraud, PNF, to be listed on the AMEX. (Jonathan Frey is
the brother of Joseph Greenwald, who has pleaded guilty to insider
trading in Motel 6. Greenwald, who had an office at Wagner Stott
and who had provided me with inside information in Motel 6 and
other issues, informed Jonathan Frey that Avasso was embarking
on a stock fraud and that this stock would be listed on the AMEX.
Frey informed Joel Lovett, the Vice Chairman of the AMEX, who
permitted the listing of PNF.
Stanley Katz, an AMEX member,
informed me that he had discussions with Biddle Worthington,
a governor of the AMEX during the introduction of PNF. Stanley
told me that Biddle had stated that he (Biddle) knew at the time
of its introduction that PNF was an Avasso controlled entity.
Stanley also informed me that Joel Lovett had permitted the listing
of PNF even though he knew that PNF was controlled by Al Avasso.
I had first been informed of
Lovett's cooperation with Miceli, VanCaneghan and Avasso by Jeff
Green on 13 September 1993. It was at this time that I first
learned that Joel Lovett had been told by Robert VanCaneghan
that he (VanCaneghan) had sexually assaulted and raped his clerks.
This conspiracy to protect Robert VanCaneghan, a confessed rapist,
has since been repeated to me by Dennis Goin, a governor of the
AMEX, and by Jonathan Frey, Joel Lovett's partner. The FBI knows
of these admissions of rape and cover-up. Attorney General Janet
Reno and United States Attorney Mary Jo White have made the conscious
decision to permit Robert VanCaneghan, a confessed rapist, not
to be tried on charges that he violated the civil rights of his
victims. (I know of seven women attacked by VanCaneghan.)
I shall relate my attempts to
interest the Department of Justice and the Federal Bureau of
Investigation in Avasso, PNF, Greyhound, and the laundering of
money.
In 1992 I attempted to interest
United States Attorney Otto Obermaier in the stock fraud, PNF,
and the insider trading scandal Motel 6, but he was not interested.
Mr. Obermaier never responded to the information with which I
had provided him.
In March 1993 I contacted an
FBI Agent Andre Cicero, who had operated a business on the AMEX.
When I first told Andre of widespread criminal activity at the
AMEX, Andre informed me that his contacts at the AMEX had stated
that I was crazy. (Even then AMEX members were lying to protect
their livelihood.) I reminded Andre that he knew that I was an
honest individual. Andre arranged for me to be interviewed by
an FBI Agent.
On 3 April 1993 I was interviewed
by FBI Agent Joseph Yastremski. I provided Joseph Yastremski
with information concerning criminal activity at the American
Stock Exchange. Among the various criminal activities was the
stock fraud, PNF, perpetrated by Al Avasso with the assistance
of AMEX members, AMEX member firms, and AMEX employees.
I also informed Agent Yastremski
that, according to Heinz Grein, Joseph Latona and Joseph Greenwald,
Avasso had earned twenty three million dollars in Greyhound Electronics
and that the money had been laundered by Heinz Grein in a Luxembourg
account.
FBI Agent Yastremski could not
understand why members of the AMEX would perpetrate a stock fraud.
I explained that there a large sum of money could be earned with
very little risk-merely a consent decree by the Securities and
Exchange Commission.
In investigating the stock fraud,
Agent Yastremski would ask me various questions.
Why would stock be traded in
various accounts by several individuals at the same price? I
replied to demonstrate liquidity and to create volume in the
stock.
One employee of the specialist
firm of Miceli-VanCaneghan, Michael Tighe, informed me that Miceli
and VanCaneghan spoke to Avasso frequently concerning the pricing
of the stock. Tighe provided me with one fascinating scintilla
of information.
Tighe told me that the market
in the stock was 8 bid at 8 1/4. An order came to the floor with
a Bache give-up. The order stated to sell 30,000 shares at eight
dollars. A call was made to Avasso. Avasso said purchase the
stock and he agreed to purchase fifteen thousand shares of the
stock. The trade did not clear. Avasso had been the seller of
the stock. So Miceli and VanCaneghan purchased thirty thousand
shares at eight dollars. (Actually their clearing firm and backer,
LIT Securities purchased this worthless stock.) VanCaneghan was
livid and informed many AMEX members that Avasso had cheated
him. (Michael Tighe, Stanley Katz and other AMEX members related
this story to me.)
The stock, PNF, collapsed after
an article detailing the involvement of Avasso, Miceli, and VanCaneghan
in the stock fraud, PNF, appeared in The Wall Street Journal.
A second article exposing Robert VanCaneghan and Louis Miceli
was being prepared. The AMEX telephoned Peter Kann, publisher
of The Wall Street Journal and a winner of the Pulitzer Prize,
and requested that the article be canceled. Peter Kann bowed
to the wishes of the AMEX and canceled the follow-up article.
PNF collapsed and was delisted
from the AMEX. An internal investigation, ordered by James Jones
and Joel Lovett to clear VanCaneghan and Miceli followed. Miceli
and VanCaneghan were exonerated because the AMEX wished no harm
done to its reputation.
NOTES
Note 1. I was the only individual connected with either Frost and Sullivan or Greenwald Securities, both American Stock Exchange member firms, who was not convicted of trading on the basis of inside information. I did not trade on the basis of inside information because I am an ethical individual. An ethical individual is the most hated person on Wall Street.
Note 2. Peter Berkmann, a former AMEX member and an individual who fronted for Al Avasso on two different occasions at the AMEX once as an independent member and the other as a principal in an AMEX trading firm, Capital Appreciation, earned in excess of one hundred thousand dollars with stock Avasso presented to him in Greyhound Electronics.
I also provided the FBI with
the name of an individual who would supply the FBI with information
concerning Avasso's illegal trading. Agent Yastremski appeared
at this individual's apartment one night and threatened to have
him arrested and charged with money laundering-a crime with which
the FBI has linked Avasso. Avasso's non-registered shares were
sold offshore. (I believe that Avasso's wife, Rita, owned in
excess of one million shares of Greyhound Electronics under her
maiden name.)
Avasso's twenty three million
dollars was laundered by Heinz Grein into a Luxembourg bank.
Note 3. It was during my interview with Assistant United States Attorney Frances Fragos on 13 September 1993 that the FBI and Assistant United States Attorney Fragos confirmed that Steven Lister, Senior Vice President of Compliance, had invested in a partnership with Al Avasso.
In September 1996 Joseph Palmeri,
a governor of the AMEX and employer of George Wellington at this
time, was informed that I had stated that Lister had engaged
in business dealings with Avasso. Palmeri replied: So what. Manfredonia
has to prove it in court. Palmeri is a moralist.
In September 1996 a friend of
Palmeri spoke to him and asked him why he became a governor considering
that Manfredonia had stated that the AMEX was protecting Robert
VanCaneghan, a former governor and confessed rapist. Palmeri
replied: Because I have business interests to protect. Palmeri
further elaborated that the AMEX had promised to provide him
with an attorney and to pay all civil and criminal fines if he
were charged with a crime such as conspiracy to protect a rapist,
etc.
It was Joseph Palmeri who hired
George Wellington after the debacle of PNF. Wellington had been
fined by the SEC for his participation in PNF. Wellington had
been disciplined by the New York Stock Exchange for another infraction.
Note 4. On 3 December 1993, my life was threatened by Alan Umbria, a self-proclaimed Mafia front man and friend of Miceli. Robert Morgenthau refused to act. FBI Agent Joseph Yastremski visited the AMEX on several occasions to speak to Umbria. I then spoke to Louis DePasquale, the Director Of AMEX Security, and informed him that FBI Agent Yastremski wished to speak to Umbria because Umbria had threatened my life. DePasquale arranged for FBI Agent Yastremski to speak to Umbria.
A copy of the letter which I
had sent to the FBI with the name of one witness was later provided
to Louis Miceli who confronted the witness on the floor of the
AMEX.