Ex-Donald Broker Sentenced to 1 Year for Stock Scheme

A broker for the now-defunct Donald & Co. Securities Inc. was sentenced in a Central Islip, New York, court to a year and a day in prison for his role in a stock-fraud scheme, according to a spokesman for federal prosecutors.

Slava Volman had pleaded guilty to charges including securities fraud, conspiracy to commit securities fraud and conspiracy to commit money laundering, said Robert Nardoza, spokesman for the U.S. Attorney for the Eastern District of New York, in an e-mailed statement.

Volman, a former principal of Donald & Co.’s Garden City, New York, branch, was charged along with eight other former Donald & Co. brokers in an indictment filed in 2004. He cooperated with the government on the investigation, according to court documents.

Prosecutors alleged the brokers profited by selling “house stocks” in which they had a secret stake, including telephone service firm Elec Communications Corp. and Italian cheese importer Classica Group, both of which became bankrupt.

The brokers kept the stock price artificially high by making unauthorized trades in customers’ accounts and disregarding sell orders, prosecutors alleged.

“None of these manipulative and deceptive acts and practices and unlawful sales techniques” were disclosed to customers because that “would have jeopardized the success of the fraudulent scheme,” according to the indictment.

Charles A. Ross, an attorney for Volman, didn’t immediately return a phone call and e-mail seeking comment on the sentence.

The case is USA v. Ingrassia, 2:04-cr-0455, in the U.S. District Court for the Eastern District of New York (Central Islip).

To contact the reporter on this story: Christie Smythe in New York at csmythe1@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.