Joe Ferragamo was been a very busy man prior to being sent to prison. I do not know how many court documents I have found pertaining to his “stock fraud.” It is hard to even put together a coherent, chronological history of his activities. The reason for this is that from 1997 to 2001 (4 years), he worked for 6 different securities firms. I am going to do the best I can to share some of what I have learned.
Here is a pieced together, partial resume, as far as I can determine (dates approximate):
12/1999 - 5/2000 - Worked for LH Ross & Co. Inc - Allegedly received Kickbacks
7/2000 - 7/2001 - Worked for Valley Forge - 2 counts Security fraud
8/2001 - 4/2002 - Worked for Yankee - Laundering money on stock deals
According to the US Security and Exchange Commission documents, a default judgment was made against Joseph Ferragamo, along with other brokers of LH Ross & Co, for allegedly violating federal security laws. Investors reportedly lost 26 million dollars in a huge broker bribery scheme involving 9 public companies. Brokers allegedly received kickbacks based on sales. Ferragamo was considered a “big producer” and therefore reportedly received 25% in kickbacks from the stocks his clients purchased. Ferragamo’s clients allegedly purchased more than 67,550 shares of stock for $606,000. He reportedly never told customers that he was receiving 25% from the sale proceeds.
Ferragamo moved on to Valley Forge Securities and, around December 2000, he took over management of the Staten Island office. There he allegedly mislead customers about the value and stability of stock. He is said to have manipulated stock and the receipt and payout of kickbacks. In January 2001, he moved his office to Maiden Lane in Manhattan. Axxess International credit cards, linked to Bahamian accounts, were issued and kickbacks were deposited to hide illegally monies from the stock manipulation scheme. Federal Prosecutors issued indictments that the Valley Forge NYC Office was allegedly controlled by organized crime figures.
In August, 2001, he met with the head of Yankee Financial, Mr. Kresge. He told him he wanted to leave Valley Forge. By October 2001, a new Yankee office was opened in Brooklyn, with seven employees, and Ferragamo was put in charge as part owner. From October, 2001 to April, 2002, ten Yankee customers, all senior citizens, invested their money based on misrepresentations and omissions. The stocks recommended were not in the best interest of the clients. This was a high-pressure, boiler-room type operation. The brokers used high pressure sales tactics, fraudulent misrepresentations, false price predictions, and left out material facts when talking senior citizens into investing in three risky stocks. As of March, 2004, the ten customers still had losses of $3,866,426. The boiler-room operation reportedly took 17 million from senior citizens by making them invest in worthless companies whose bank accounts had only $120.
On May, 19, 2004, concerning his Valley Forge scheme, Ferragamo pleaded guilty to one count of money laundering in the 3rd degree and admitted to withdrawing $556,000 from his foreign account. It seems, from the research, that Ferragamo admitted to laundering over $500,000 in kickbacks that he received from security fraud transactions. He deposited the money in a bank in the Bahamas, called Lendenhall. Then, between February, 2001 and September, 2001 he used his Mastercard, from that bank, to make cash advances in $1,000 increments. He allegedly repaid the cash advances with the kickback money in the Lendenhall account. He paid no taxes on his Bahamian money.
I have to wonder what those poor senior citizens are eating and how they are living while Carla is out on the town with friends, paying her gym membership, buying sleeveless furs, countless shoes and starting up a clothing line with their money? Is she squandering their hard earned money? If so she has no qualms or guilty conscience about doing it. Her mother’s attitude is that it’s no “big deal.”
Considering Carla’s mother is a senior citizen herself, you would think she might have some empathy for her elderly peers. But then again, I’m sure she has gotten some very nice birthday and Christmas gifts out of it over the years. So, like she said, it’s no big deal.