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December 18, 2016

Wall Street: Why Money And Injustice Always Won

Wall Street: Why Money And Injustice Always Won

Arthur Levitt, the former Securities and Exchange Commission chief — see no evil; hear no evil?
I explained to the FBI’s Yastremski that several years previously Scott Schrammer, a close friend of VanCaneghan and an Amex member, told me that Miceli was smuggling drugs from the Bahamas.
By Edward Manfredonia

[Policing Wall Street]

This column is the sixth in a series of articles that describe pandemic criminal activity at the American Stock Exchange and the attempt of the Department of Justice to investigate these violations of federal law.

The United States Attorney and the Federal Bureau of Investigation had initiated an investigation into violations of federal law at the Amex- specifically into the Mafia stock fraud, PNF, and the involvement of Louis Miceli and Robert VanCaneghan, members of the Board of the Amex in the stock fraud.

After I had informed Assistant United States Attorney Frances Fragos that VanCaneghan had admitted to members of the Amex Board that he had sexually assaulted his female employees, Fragos was furious.  Fragos, who later became President George W. Bush’s advisor on Homeland Security, and FBI Special Agent Joseph Yastremski were making rapid progress in their investigations.

But there was a problem. Arthur Levitt, Chairman of the Securities and Exchange Commission and former Chairman of the Amex, was very upset about the federal investigation into the criminal activities of Miceli and VanCaneghan, two members of the Board of the Amex.  As Chairman of the SEC Levitt was aware of pandemic criminal activity at the Amex- including price fixing in options, the theft of $500,000 by Charles Diecidue from the Amex, and Mafia penetration of the Amex, all of which had occurred when Levitt was Chairman of the Amex.

The FBI had information that Al Avasso, a stock fraud artist and front man for the Italian Mafia, had bribed Steven Lister, a protégé of Levitt and Senior Vice President of the Amex for Compliance, during tenure as Chairman of the Amex. Now this was a felony- a clear cut violation of the Securities Exchange Act of 1934. And just as Levitt took no action against Charles Diecidue, Vice President of Purchasing at the Amex and Director of Security, for stealing $500,000 from the Amex during Levitt’s tenure as Chairman, no action was taken against Lister, whom Levitt had personally promoted to Senior Vice President.

Early one morning in September 1993, the FBI’s Yastremski called me at home. Two friends were with me and were examining some information that I had received.  I asked one to listen to the conversation on the extension.

Yastremski asked me if I had heard anything extraordinary about Miceli and VanCaneghan. Yes; I said. I explained to Yastremski that several years previously Scott Schrammer, a close friend of VanCaneghan and an Amex member, told me that Miceli was smuggling drugs from the Bahamas. More importantly, I had heard Miceli discussing the operation when he was showing VanCaneghan a nautical map of his planned trip from Florida to the Bahamas aboard his boat. Yastremski asked me for the name of Miceli’s boat. “The Jaded Lady,” I told him. Yastremski already had this information and was apparently cross-checking.

It was the money laundering and the sexual assaults — I have extensively covered these in previous columns– which worried Levitt the most. The money laundering could have international implications and spark a federal investigation into the Amex and Spear Leeds and Kellogg.

Heinz Grein, for example, had laundered in excess of $20 million for Al Avasso, which Avasso had made in the stock fraud Greyhound Electronics, into a Luxembourg bank; Grein had also boasted of laundering $10 billion, which Ferdinand Marcos had looted from the Philippines into a Swiss bank. The SEC was aware of all this. An expose of Grein’s money laundering would have caused an international incident.

So the tug of war between justice and injustice continued.  And as always, money was on the side of injustice.
Manfredonia, a former trader, was thrown out of Wall Street when he became a whistleblower.


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