It's dinnertime at Pasta Luna, a new cafeteria-style Italian restaurant in Richmond, Va. Standing near the kitchen is a balding, middle-aged man with his remaining gray hair bound tightly in a short pony tail. "All fresh, homemade ingredients," he tells a customer. After he concludes his amiable sales pitch for the restaurant, he proclaims: "This may be the best Italian food in the country."
Sure, it's hyperbole--but that's no surprise. The host is none other than Peter T. Caserta, whose bold pronouncements and alleged half-truths transformed Spectrum Information Technologies Inc. into one of the top performers on the stock market over a year ago. Perhaps the greatest display of Caserta's talents was convincing former Apple Computer Inc. Chairman John Sculley--who had also been rumored to be in the running for the top jobs at IBM and Motorola, to head the Manhasset (N.Y.) company that developed wireless transmission technology. Sculley quit four months later in February, 1994.
The Spectrum episode faded last spring after postal inspectors raided Caserta's former consulting firm, Caserta Group, arresting five executives and charging them with wire and mail fraud. All five have pleaded not guilty. Caserta has never been arrested or charged with anything.
AWAY FROM IT ALL. Now this corporate melodrama is about to have a second act. In an expansion of the original U.S. Postal Service investigation, as many as a dozen former employees and associates of Caserta Group, later renamed Paradigm Group Inc., are expected to be indicted by a federal grand jury in coming weeks, according to sources familiar with the investigation. These sources say they will likely be charged with collecting fees from small high-tech companies for investment banking services that were rarely delivered. Even though Caserta had sold the firm before the raid, the grand jury is looking at transactions that occurred during his tenure, these sources say. Caserta and his attorney declined to talk about Spectrum or the possibility of indictments.
Working in a small restaurant seems quite a comedown for Caserta, who pocketed $8.4 million by selling Spectrum shares as they soared on news of Sculley's arrival in late 1993. He resigned from Spectrum in June, 1994. "I moved to Richmond with my family to get away from all that stuff in New York," says Caserta, 52. "I'm just trying to put my life back together."
Caserta apparently moved to his wife's hometown in April. Then, last month, the self-described gourmet cook opened his restaurant in a strip shopping center. It's very much a family affair, as was Spectrum and Caserta Group. Pasta Luna is owned by PTW Group Co. Caserta's wife Terry, former treasurer of Caserta Group, is listed as president of the company, according to state records. Caserta's son, Peter Jr., a former vice-president of a Spectrum subsidiary, also works at the restaurant. PTW's liquor license application states that Pasta Luna could bring in monthly revenues of $115,000. "I'm no big shot," insists Caserta, who says he does everything from serving customers to working in the kitchen.
GOBBLED UP? It's unlikely he would continue to labor in anonymity if indictments are handed up. Sources familiar with the investigation claim the U.S. attorney's office in Brooklyn, N.Y., has been gathering evidence to flesh out a complaint it filed last March, alleging that the Caserta Group took in nearly $2 million a year in fees from small companies by falsely promising to find new investors for them. Caserta and his attorney declined to comment on the allegations.
The grand jury probe is not the only legal hassle awaiting Caserta. The Securities & Exchange Commission continues an investigation into whether Spectrum executives manipulated the company's stock. Neither the SEC nor Spectrum will comment on the investigation. Meanwhile, Spectrum shareholders are pressing a suit against Spectrum, Caserta, and Sculley, alleging stock-price manipulation and insider trading. All have denied any wrongdoing.
As for Spectrum, it filed for Chapter 11 bankruptcy protection on Jan. 22. Spectrum declines to discuss its current situation or Caserta. Still, it vows to resume profitable operations. Maybe so. But Heiko H. Thieme, chairman of the American Heritage Fund, Spectrum's largest shareholder, believes the company may "seek a strategic partner or be gobbled up by another company." Either way, Spectrum, like Caserta, is learning to survive amid humbler circumstances.
Founds Caserta Group to secure financing for high-tech startups
Named Spectrum CEO after serving as director and vice-chairman
Opens Pasta Luna, an Italian cafeteria-style restaurant in Richmond, Va.