A N.Y. stockbroker and a Chicago futures trader were convicted Feb. 13 of scheming to bribe union bosses to invest millions of dollars of pension fund money with a corrupt money manager. Stockbroker John M. Black, who authorities say was a Luchese organized crime family associate, and futures trader Glenn B. Laken were convicted today of racketeering, bribery and fraud. Among those whom they planned to bribe were bosses with the Annuity Fund of the N.Y.C. Police Detectives Endowment Ass’n, the independent Production Workers Local 400 in N.Y.C., and Int’l Union of Operating Engineers Local 137 in Briarcliff Manor, N.Y. The verdict was reached at the conclusion of a three-month trial before U.S. Dist. Judge William H. Pauley, III (S.D.N.Y., Clinton).
Federal prosecutors said Black, a principal in Grady & Hatch Co., and Laken, a principal in TradeVentureFund, worked with a mob-controlled investment bank in lower Manhattan, DMN Capital Inc., in planning illegal payoffs to union bosses. The goal was to induce pension fund managers to shift some $300 million in union pension funds to the control of a crooked investment adviser. Laken agreed to pay secret kickbacks to the principals of DMN Capital to raise money for TradeVentureFund on the understanding that the kickbacks would pay off union bosses for switching pension fund money to the corrupt hedge fund.
The two were indicted in June 2000 along with 118 others as part of the FBI’s “Operation Uptick,” which targeted mob influence on Wall Street. So far, 92 defendants have been convicted of various fraud schemes and another 17 cases are pending. The federal jury in Manhattan also acquitted three other men who were on trial with Black and Laken: Dallas-based real estate developers Gene Phillips and A. Cal Rossi as well as San Francisco-based investment strategist William M. Stephens. Of the 120 defendants charged, 11 have had the charges against them dismissed or were acquitted at trial. Black and Laken face up to 20 years in prison at their sentencing scheduled for May 31.
No bribes were ever paid, and the union money was never diverted to the other investments. Arrests were made before any union pension funds were squandered. Most of the evidence at trial against Stephens arose from 30 to 35 hours of taped conversations between the various defendants and Jeffrey Pokross, a government informant who ran a corrupt investment bank that had been infiltrated by the Gambino and Bonanno crime families, DMN Capital On the tapes played in court, Pokross made reference to bribing pension fund managers in conversations with Stephens. But Stephens, the only defendant to take the witness stand in his own defense, testified that he did not believe Pokross was serious and was merely going along with him to meet potential new clients. [Bloomberg News 2/13/02; Chi. Trib., Daily News (N.Y.C.), S.F. Chron. 2/14/02]