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FOR IMMEDIATE RELEASE |
CONTACT: Erin Duggan |
DISTRICT ATTORNEY CYRUS R. VANCE, JR. ANNOUNCES INDICTMENT OF STOCKBROKER |
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| Manhattan District Attorney Cyrus R. Vance. Jr. announced today the indictment and arrest of a stockbroker who stole $780,000 from Merrill Lynch. STEVEN MANDALA, 29, has been indicted on felony charges of grand larceny, money laundering, criminal possession of a forged instrument, falsifying business records, and identity theft [1]. As charged in the indictment and described in court documents, MANDALA was employed as a stockbroker with Maxim Group, earning about $100,000 a year, when he applied for a job with Merrill Lynch. MANDALA falsely told Merrill Lynch that he was a partner with Maxim Group, that his clients entrusted him with $300 million of assets to manage, and that his work produced $1.5 million in revenue, of which he received compensation totaling $765,000. MANDALA produced false pay stubs, tax returns, and W-2 forms in support of his fraudulent claim. Merrill Lynch relied on MANDALA’S false representations, and entered into an employment contract with him on April 24, 2009. That same day, the parties executed a promissory note under which Merrill Lynch advanced MANDALA a loan of $780,000, to be paid back over an 8-year period. Such loans are common in the securities industry as a means of luring high revenue producing traders and brokers to join new firms. The investigation by the Manhattan DA’s Office further showed that MANDALA deposited the $780,000 check from Merrill Lynch in his parents’ bank account, according to court documents. Barely one week later, MANDALA withdrew $245,580 from the account, and used the money to purchase a Ferrari in his father’s name, which is also Steven Mandala. Over the next two months MANDALA frequently did not show up at his new job, and brought in only two or three clients with assets of about $20,000. MANDALA resigned from his position with Merrill Lynch by e-mail on June 29, 2009, barely two months after joining the firm and receiving the $780,000, and asked his employer to discard his personal effects. Among the items MANDALA left behind at Merrill Lynch were credit cards in the name of Carlos Gomes, his girlfriend’s father. Further investigation revealed that MANDALA had stolen the identity of Mr. Gomes, and had charged tens of thousands of dollars on the credit cards before they went into collection, as charged in the indictment and described in court documents. Assistant District Attorney Hope Korenstein presented the case to the grand jury, under the supervision of Frauds Bureau Chief Michael Kitsis and Deputy Chief Micki Shulman. Investigator Terence Hayes led the investigation under the supervision of Supervising Investigator Jose Flores, Chief Joseph Pennisi, and Assistant Chief Terence Mulderrig of the District Attorney’s Investigation Bureau. Investigative Analyst Eunice Choi assisted in the preparation of the case. Defendant Information: Charges:
A class C felony is punishable by up to 5 to 15 years, a class D felony is punishable by up to 2 1/3 to 7 years, and a class E felony is punishable by up to 1 1/3 to 4 years in prison [1] The charges contained in the indictments are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
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