Sky Capital’s Mandell Is Found Guilty on All Counts in $140 Million Fraud
By Patricia Hurtado and Chris Dolmetsch – Jul 26, 2011 3:42 PM ET
Sky Capital Holdings Ltd. founder Ross Mandell was found guilty by a federal jury in New York for operating what the U.S. said was an eight-year long scheme that defrauded investors out of $140 million.
Mandell, 54, of Boca Raton, Florida, was found guilty of all four counts he was charged with, conspiracy, securities fraud, wire fraud and mail fraud, after a trial before U.S. District Judge Paul Crotty in Manhattan.
Adam Harrington, 41, of Miami, a former broker at the firm who was tried with Mandell, was found guilty of the same four counts.
The federal jury in New York began their deliberations July 22.
Mandell and Harrington were accused of manipulating shares in two Sky Capital companies traded on the Alternative Investment Market of the London Stock Exchange. The U.S. said the two solicited millions of dollars from victims for what they claimed were restricted stock offerings or private placements that promised large returns.
Prosecutors said the evidence showed the funds were used to enrich the defendants who spent tens of thousands of dollars for personal expenditures like private jets, luxury hotels and expensive Swiss watches.
Mandell, Harrington and others at the firm also used the money to pay themselves excessive commissions and pay off other victims who’d lost money through prior purported investment opportunities, Assistant Manhattan U.S. Attorneys Pablo Quinones and Katherine Goldstein argued during the trial.
Four other men were arrested and charged in the case and have pleaded guilty. Two of them, Robert Grabowski and Michael Passaro, both former Sky Capital brokers, agreed to cooperate with the U.S. and testified against Mandell and Harrington during the federal court trial in New York.
The criminal case is U.S. v. Mandell, 09-cr-00662, U.S. District Court, Southern District of New York (Manhattan).
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