Scheme centered on four underworld figures and six stockbrokers who agreed to hype penny stocks. Reputed capos in the Genovese and Bonanno crime families are expected to plead guilty today to charges stemming from a massive stock-market manipulation by organized-crime figures.
Rosario “Ross” Gangi and Frank “Curly” Lino are expected to plead guilty to fraud and extortion charges before Manhattan federal Judge Denny Chin, sources told The Post.
The so-called “Mob on Wall Street” indictment of 19 people rocked the financial world last year as the case revealed the market’s vulnerability to underworld infiltration.
The scheme centered on four underworld figures and six stockbrokers from the Manhattan firm Meyers, Pollack and Robins who agreed in December 1996 to hype penny stocks for the Arizona-based Health Tech International.
In the massive “pump and dump” scheme, brokers lied to investors about Health Tech’s condition and pushed the stock, sending its price per share up to $1.34 from 87 cents. The defendants raked in a cool $1 million by the time the scheme ended in June 1997.
The plot also involved threats of violence, including holding a knife to the wife of a Health Tech official, the indictment charged.
Gangi, the alleged ringleader, recently was sentenced to 70 months behind bars after being convicted of racketeering and extortion in New Jersey. He is expected to have 17 months added to his prison term under the deal.
Lino is expected to be hit with a 57-month term.
A third defendant, Eugene Lombardo, is expected to get hit with an 87-month prison term.