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Classic 'Boiler Room' Operation in Staten Island Strip Mall
September 22, 2011
An ex-Gryphon salesman was given a 2-year prison sentence for his part in, what prosecutors described as, a classic "boiler room" fraud run out of a Staten Island strip mall. Baldwin Anderson, 57, pleaded guilty in July to one count of securities fraud, just one day after he went to trial.
The prison sentence, handed down by U.S. District Judge Jack Weinstein in Brooklyn federal court, is well below the 25-year statutory maximum for securities fraud, as well as the 22-year maximum recommended under federal sentencing guidelines. In announcing the sentence, Judge Weinstein told Anderson, "I'm very sorry to have to do this. You seem like a decent person."
In all, 18 defendants have been charged since Gryphon was shut down by federal officials in 2010.
The Boiler Room Operation. Prosecutors said Gryphon sales staff pressured more than 5,000 individuals into purchasing increasingly expensive subscriptions to newsletters with names like "6 AM Money Machine" and "Wolves of Wall Street," as well as stock-recommendation software and stock tips generated by fabricated investment gurus.
Instead of Wall Street offices and high-profile investment geniuses, prosecutors said Gryphon was headquartered in a Staten Island strip mall and run by Kenneth Marsh, who went by a string of aliases including "Michael Warren" and "Ken Maseka" and claimed impressive, but fake, investment credentials.
Anderson's attorney, Michael Padden of the federal public defender's office in New York, described his client as a "decent, hard-working" man who was "blinded by the success" of the Gryphon venture. To the end, Anderson believed the investment tips Gryphon sold were helping people, not hurting them, Padden said.
Anderson, a Jamaican citizen, could be deported after his sentence is served, Judge Weinstein said Tuesday. He is also responsible for paying up to $3.2 million in restitution to Gryphon investors. [Reuters, 9/15/11]
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