Nothing But Money (27 page)
Authors: Greg B. Smith
He figured they owed him big-time.
“It was a stock promoter’s dream—an unrestricted broker /dealer based outside of the scrutiny of New York City,” Cary remembered. “Albeit the company had no sales force, but since it was unrestricted, it could grow as fast as Jeffrey could fill it up with his friends. They could make an enormous amount of money with a sales force who came from firms known to make markets in high-commission, low-quality stocks called chop stocks. Brokers from these firms could be expected to be more interested in chop stocks than a broker from an NYSE firm. Once fully operational, with a sales force, Pokross could supply his friends with large amounts of shares, many of which he owned directly or indirectly, with high commissions.”
But of course, it couldn’t last.
A few weeks after the certified letters from NASD showed up, the phone call came from the NASD. Somehow despite Jeffrey Pokross’s best efforts to keep it off the radar screen, the NASD had noticed Reclaim and Accessible and Spaceplex and all the rest, and connected the up-and-down pattern to Monitor. The phone call was notification of a formal NASD challenge.
Monitor had a choice. They could fight the challenge, and subject themselves to scrutiny with document production and depositions and all the rest. Or they could fold their cards and go away. The choice was obvious. By the end of the business day, Monitor had notified the NASD that it would voluntarily cease trading and market-making operations immediately.
The plug was pulled on Monitor.
“On the surface Monitor showed all the signs of legitimacy,” Cary recalled, “but in the background, it was a scam.”
Still, DMN stayed out of the sun, and Jeffrey Pokross—as always—had a new plan. Days after Monitor shut down on June 12, 1996, Jeffrey flew to Florida to meet with the head of another brokerage he was all excited about—Meyers Pollack. They were up and running with a whole stable of corrupt brokers ready to push the next stock, Innovative Medical Services. It was easy money—a San Diego company that purported to sell water filtration devices for pharmacies. They intended to raise $4 million. Monitor was just starting to work that one when the NASD spoiled the party. No matter. Meyers Pollock could handle it.
When Innovative Medical Services began trading in August 1996 under the symbol PURE, it opened at $4. By day’s end, the brokers of Meyers Pollock had done what the brokers of Monitor could no longer do—they had driven the price up to $7 per share.
Monitor’s demise was but a speed bump on the auto bahn to instant affluence.
October 10, 1996
Jeffrey Pokross emerged from the PATH train into the station deep inside the World Trade Center concourse. He was just one of the millions of salary-earners streaming out of New Jersey into the New York City morning to earn their daily bread. The place was, as usual, like a cattle yard, a sea of hardworking humanity fueled by caffeine and driven by the desire to make money. The commodities exchange was here. Numerous brokerage houses were up in the twin towers. Wall Street was just a few blocks away. Jeffrey Pokross, like the rest of the crowd, trudged along, the latest stock DMN was pushing weighing heavily on his mind.
The stock was called Crystal Broadcasting. He’d gotten the deal from a soldier in the Bonanno crime family who’d been referred over by Robert Lino. The guy wanted a 50/50 split, and that wasn’t a problem. The stock wasn’t really a problem either. Anything even resembling communications was selling these days. Pokross’s biggest pressure was assembling an army of corrupt brokers to push Crystal on the unsuspecting investing public.
After a few false starts, everything seemed to be going as planned. True, Monitor had imploded and Meyers Pollock hadn’t worked out. There was some dispute with the Genovese crime family over who got to run the place and Jeffrey had been forced out the door. But he and Sal and Jimmy were now working on taking over another brokerage, also in the Philadelphia area, this one called First Liberty. Forget about the WASPy names. This one even had a taste of the Founding Fathers thrown in.
Also they still had some of the old high-producers from Monitor like Cary Cimino and Todd Nejaime and Warrington Gillet. But the best news was a new prospect that seemed quite promising named Jeff Morrison, working out of One World Trade Center. His firm was called Thorcon Capital, which was where Jeffrey was headed now.
Morrison had come to DMN a few months back, recommended by Cary Cimino. He’d made it clear what he was willing to do.
“He said he was looking for some stocks that he can put out to some wealthy clients that he has and he can hold on to those stocks for an extended period of time,” Pokross recalled. “And for doing that, he was looking to get a bribe. I thought it was great. We ended up constructing a deal on this Crystal Broadcasting where he would put out the stock to his wealthy clients, he wouldn’t disclose that he was getting a bribe, and we sent him some stock in Crystal Broadcasting in advance—anticipating that he would do a lot more business. We sent him some stock that he can just hold on to that he can just pay the bribe, pay himself the bribe as he continued to book more stock to his customers.”
So far DMN had sent Morrison nine thousand shares of Crystal, trading around $5 through something called a depository trust company. Morrison had sold off about two thousand of those shares. Jeffrey looked at the business he was doing with Thorcon as an investment of sorts. He believed that Jeff Morrison would be ready to do more deals when Crystal Broadcasting was over, which was one of the subjects he hoped to broach when he arrived at Thorcon’s offices.
As he emerged from the PATH station into the concourse itself, he noticed Jeff Morrison walking toward him with another guy he didn’t know. The concourse was a maddening place, with people streaming in every direction simultaneously, so Jeffrey couldn’t even be sure the guy was with Morrison. That’s why it didn’t seem strange when Morrison walked right up to him smiling. What did seem strange was that the guy walking next to Morrison was holding a gold badge out in front of him.
“Jeffrey Pokross?” the guy asked, and Pokross didn’t respond. “I’m Special Agent True Brown of the FBI. This is Special Agent Joe Yastremski.”
The guy with the badge was pointing right at Jeff Morrison of Thorcon Capital when he said this, and Jeffrey Pokross suddenly understood everything.
December 1996
The holding cell next to the fifth-floor magistrate’s courtroom in the Southern District of New York is a pretty antiseptic place. There are no windows. The walls are pale gray-blue concrete and there’s about enough room for one dozen defendants. That’s what you are when you’re in that room—a defendant. You might be a drug dealer from the projects, a terrorist from the slums of Egypt, a lawyer gone bad or—as was the case this morning—a busted stockbroker. It didn’t matter. You were a defendant. At least you weren’t an inmate, yet. That was still only a possibility because when you sat outside the magistrate’s courtroom, waiting for your turn, you were still considered merely charged with a crime. Not convicted. Just charged.
This distinction was on Cary Cimino’s mind when he saw Jeffrey Pokross sitting at the other end of the cell. It was a pretty unusual sight, seeing Jeffrey there under these circumstances. It made it seem more real, tougher to ignore. The whole scene didn’t seem right. Cary always pictured jail cells full of people like Snoop Dog or Humphrey Bogart or Jimmy Labate. Tough guys. Not like this, a cell full of stockbrokers. A cell where your cellmate is named Jeffrey Pokross.
“This is your fault,” Jeffrey hissed, and the two of them began screaming at each other until a marshal came and told them to shut up.
Cary decided merely to glower at Jeffrey, who glowered back approximately the same amount.
As far as Cary could tell, the charges filed against him seemed somewhat vague. It appeared he had violated some specific provisions of the United States Criminal Code regarding securities fraud. Specifically he had bribed brokers to hype stock, and received bribes in the form of hidden commissions. Cary couldn’t decide whether this was serious or not. He certainly did not enjoy sitting in the holding cell inside federal court, but the complaint he’d been shown seemed laughable, as if they were charging him with having too many parking tickets. What they were charging him with was as common a practice in the over-the-counter market as any.
Cary also tried unsuccessfully to remember who’d introduced him to Jeffrey Morrison of Thorcon Capital. Cary was aware that he was the one who had put Thorcon with DMN, but he couldn’t really blame himself. Thorcon seemed so real. Jeff Morrison talked the talk. How was Cary supposed to know the guy was FBI?
That was certainly his reaction when the FBI had first knocked on his door at 6:30 a.m. that morning. At first he couldn’t figure which broker turned him in, but the more he thought about it the more Thorcon seemed the likely suspect. It was too perfect. Jeff Morrison was too willing to help out. If only Cary had hesitated, but then why would he? The guy was just another broker with a deal. That was the way Wall Street worked, wasn’t it?
Jeffrey was led out of the cell first for his appearance before the magistrate, and then it was Cary’s turn. As he stepped out into the courtroom, he was confused.
Usually the uniforms of life make it easy to tell who is who and where you are in the food chain. You can tell the real estate broker selling the house is the woman with the floppy hat and clipboard. The manager at the Kmart wears the short-sleeve button-down shirt and clip-on tie, while his minions wear ludicrous matching smocks emblazoned with the Kmart logo. Here in the courtroom, some distinctions were obvious. The judge wore a black robe and sat above everyone else, letting everybody know who was in charge. There was one guy dressed in a pale blue jumpsuit with laceless rubber-soled shoes. His hands were cuffed behind him and he had two big guys in suits sitting next to him. Cary guessed that he was a real criminal and the guys next to him were marshals. Beyond these two, it was tough to tell who was who.
Specifically, it was tough to tell the lawyers from the clients. Most of those arrested were stockbrokers, and most had been arrested on their way to work. They still wore their suits, which made them look just like the lawyers paid to defend them. The difference was that none of the stockbrokers had ties or belts or laces in their shoes. The marshals frowned on suicide attempts while in United States custody.
Cary wasn’t quite sure what to expect. His experience with the court system until this day was limited. He’d once had a beef with a guy over money owed on a parking space. He’d been parking his Mercedes there, and an attendant also let him leave his motorcycle. Then the owner started claiming he owed back rent. Cary spirited his car out of the garage, and then tried to get his motorcycle. When they guy threatened to kick his ass, Cary returned with one of Jimmy Labate’s friends and a gun. The guy let him take the motorcycle and then called the cops.
That case had been settled in state court without anything going on Cary’s record. This was different. This was federal. Cary calculated how much money he would have to spend on lawyers.
His lawyer, Michael Bachner, was as experienced at criminal defense as any lawyer doing regular work at the Manhattan Federal Court. He told Cary not to sweat it, and arranged with the prosecutor for his release on low bail bond—$50,000, with no cash down. He just had to get two friends or family to cosign the bond by the following week. He did have to surrender his passport and would have to ask the government’s permission to travel outside the New York City area, but otherwise he was free to go. This wasn’t serial murder or racketeering or even narcotics. This was obscure white collar crime, and difficult to understand at that. When he was finished filling out all the paperwork, getting his mug shot, cleaning the fingerprint ink off his fingers, Cary decided he would call up DMN first thing and make an appointment with is codefendant, Jeffrey Pokross.
Jeffrey agreed that a sit-down in a setting other than the holding cell in Manhattan Federal Court was a not a bad idea.
The two met at DMN’s Hanover Square office and went over their respective complaints. Jeffrey, too, had been released on low bail. Jeffrey’s lawyer was telling him the same thing Cary’s was—the case is a joke. They’d fight it and win. The more they discussed the situation, the better Cary felt.
The two men tried to figure out how many people they knew of the forty-four who were picked up by the FBI in the bust. They recognized about a dozen names. That indicated to them that whatever they were allegedly doing on Wall Street was hardly unusual. Three dozen strangers were doing the same thing. Jeffrey argued that spending money on a good lawyer was a sound investment. They would surely walk away from this without any trace of criminality on their record.
Cary felt Jeffrey knew what he was talking about. He’d spent a lot of time around people who’d actually been to prison, so he could talk about strong cases and weak cases. Jeffrey said all the feds had was the FBI undercover, Morrison, and maybe some taped conversations. They’d still have to show that Cary and Jeffrey actually knew they were breaking the law when they made deals with Thorcon Capital. That wouldn’t be so easy. Surely the charges would be dismissed. They just had to be. The Wall Street boom was just beginning to really take off, and Jeffrey and Cary did not want to be left behind.
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