Suspected Gambino Broker Charged
NEW YORK (AP) _ The Securities and Exchange Commission has joined a growing list of state and federal authorities who, along with a reputed organized crime family, wants justice against a fugitive stock broker.
The SEC brought civil charges Monday against Mohammed Ali Khan, 34, who last week was charged criminally with fraud by state and federal authorities.
Besides his trouble with the law, Khan also has been accused of stealing more than $2 million from reputed mobster Thomas Gambino and his family.
The SEC said Khan of Jersey City, N.J., broke securities laws shortly after the 1996 opening of Klein Maus & Shire, a now-defunct brokerage firm at 110 Wall St.
As president of the firm, Khan allegedly directed a private sale of preferred stock in which he told prospective investors that the firm was a full-scale investment bank with assets of $27 million when it was staffed by only a few professionals, had few business activities and assets totally less than $1 million, the SEC said in court papers filed in U.S. District Court in Manhattan.
Last week, Khan was charged by the state attorney general’s office with grand larceny for allegedly stealing more than $1.26 million from five clients, including Gambino.
Gambino and several members of his family have sued Klein Maus & Shire and one of its brokers, Maurice Gross, alleging the family was cheated out of at least $2 million and maybe as much as $4 million by the firm.
Authorities say Khan has fled, probably with the help of others, and is now a fugitive.
A federal criminal complaint last week charged Kahn with securities fraud for allegedly selling $2.7 million worth of his firm’s preferred stock to 55 investors by making false claims.
If convicted on criminal charges, Kahn could face up to 10 years in prison on federal charges and up to 15 years in prison on the most serious state charges.