Ex-Brokerage Firm Head Sentenced in Case
GARDEN CITY, N.Y. (AP) _ The former head of a defunct brokerage firm was sentenced Friday to six and a half years in prison after previously pleading guilty to federal charges of conspiracy, stock fraud and money laundering.
Mark Hanna, 43, of Muttontown, was ordered to surrender to begin serving his sentence on June 28.
U.S. District Court Judge Arthur Spatt in Central Islip also ordered Hanna to pay $38 million in restitution and to three years of supervised release after he leaves prison.
Hanna, the former head of the Harriman Group, located in Syosset and Jericho, was one of 29 brokers, mostly from Long Island, who were charged in February 2001 with selling customers shares in initial public offerings whose value they had fraudulently inflated. All but one of the 29 have been convicted.
One federal official estimated that 3,577 people were victimized by Hanna’s scheme, and estimated their losses at $100 million. Hanna pleaded guilty in November 2002.
Spatt noted during the sentencing that he detected little remorse on Hanna’s part.
``All I see is impatience and irritability before me,″ Spatt said, according to an official who attended the sentencing.
Marshall Bernstein, 57, of Englewood, N.J., the head of another firm involved in the scheme, Maidstone Financial in Manhattan, has also pleaded guilty to conspiracy to commit securities fraud, mail fraud and wire fraud and is awaiting sentencing.
Prosecutors said the scheme operated from 1992 until 1997, when the firms filed for bankruptcy protection, following the start of an investigation by the FBI, the Postal Inspection Service and the Internal Revenue Service Criminal Investigation Division.
``We followed the money,″ Joseph Foy, an IRS spokesman, said Friday.
Hanna, Bernstein and the others lured clients by talking about investments in blue chip stocks, then used misleading information to get them to switch to the artificially inflated IPOs, according to Foy. The brokers also purchased stock on their clients’ accounts without their permission, collecting commissions for doing so.