Money Laundering On Wall Street?

By all outward appearances, Aleks Paul embodies the American dream. His nickname is Russian--"Losha"--but he came to the U.S. from Israel, not the former Soviet Union. In his 11 years running a jewelry business out of a tiny booth in Manhattan's 47th Street Diamond District, the 40-year-old Paul accumulated all the trappings of upper-middle-class solidity, from a two-year-old Mercedes-Benz to a modest home in the prosperous Long Island suburb of Kings Point.

But there is a dark side to Aleks Paul--or at least, so says the FBI in court papers filed under seal in the U.S. District Court in Manhattan. On July 17, Paul was quietly arrested by federal agents and charged with violating federal currency reporting laws. As alleged by an FBI agent in the sealed criminal complaint against Paul, a copy of which was obtained by BUSINESS WEEK, Paul is accused of having a sideline involving not gemstones but rather the fool's gold of Wall Street--fraudulent micro-cap stocks.