Another way we get screwed.
The root of this evil are offshore hedge funds IMO.
The FBI on Thursday night arrested Franklyn Michelin, president of now-closed securities brokerage LH Ross, on charges of securities fraud
The Palm Beach County Sheriff's Office Web site says the FBI arrested Michelin and booked him without bond.
Officials of that office did not have additional details readily available.
An FBI affadavit said the arrest stemmed from Michelin agreeing to pay kickbacks to an undercover agent who posed as the corrupt manager of a fictitious hedge fund in Boca Raton. The undercover agent told Michelin he would purchase LH Ross stock in exchange for a 30 percent kickback that would not be disclosed to the hedge fund or its clients.
The affidavit said that Michelin wired $20,000 from his personal account as an initial kickback.
March 31, the National Association of Securities Dealers expelled LH Ross, which was based in Boca Raton. Michelin, who founded that firm, agreed to a permanent ban from the securities industry.
The NASD, in previous orders, found LH Ross and Michelin had engaged in widespread securities fraud, including sales of unregistered offerings of its own stock in which investors lost more than $12 million.
Salvatore Puccio, a former LH Ross broker and a central figure in a federal and state investigation of a purported organized crime organization, is among LH Ross employees the NASD mentioned in complaints against the firm.
Michelin is listed as a material witness in an indictment, under seal in federal court in Fort Lauderdale. The U.S. Attorney's Office filed the indictment in February against Puccio and several fellow defendants.
Feb. 3, the Broward Sheriff's Office arrested Puccio and 22 others it said were linked to the Bonanno crime family in activities including loan sharking, stock market scams, offshore betting, dealing in stolen property and narcotics distribution.
The BSO calls the case Operation Coldwater, because the group's purported leader, Gerard Chilli, lives in an oceanfront condominium in Hollywood.
Early this month, BSO spokeswoman Elizabeth Caldazilla-Fiallo said her agency cannot discuss the case "because it is a part of an open and ongoing investigation of organized crime and is in the hands of state and federal grand juries."
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