Ex-WJB Capital Heads Get Up to 4 1/2 Years for Scam

  • *Former brokerage executives pleaded guilty to fraud in July
  • *`I'm sorry,' one says before more than 50 friends, relatives

Two former WJB Capital Group Inc. executives were sentenced to as long as 4 1/2 years in prison after pleading guilty to scheming to defraud investors of more than $11 million in an effort to prop up the now-defunct broker-dealer.

The firm’s former chief executive officer, Craig A. Rothfeld, 44, of Manhattan, and co-founder Michael N. Romano, 43, of Commack, New York, admitted in July that they stole more than $1 million each from the firm by lying to lenders about WJB Capital’s finances.

Prosecutors said the men used some of the money for personal expenses, including homes in Manhattan and the Hamptons, as well as hotel stays, luxury cars and nightclub visits.

They apologized for their actions Tuesday in a hearing in a Manhattan courtroom packed with more than 50 friends and relatives.

“I’m sorry for all that’s come in the past, and I’m sorry to anyone we brought harm to,” Romano told the court before he was sentenced by Justice Melissa Jackson of New York Supreme Court. The men had faced terms as long as nine years if convicted of all the charges against them.

WJB Capital stopped operating in January 2012 as trading slowed, capital dried up and interest rates of 25 percent on some loans forced the firm to put more than 100 employees out of work.

2008 Crisis

Defense attorneys have said that the men were just trying to keep the firm alive after the 2008 financial crisis and didn’t set out to steal from investors or use the company’s money improperly. Alcohol and drugs played a role in Romano’s actions, while Rothfeld has sought treatment for gambling problems, their lawyers said.

“This is a man who’s worked his whole life to provide for his family,” Romano’s attorney, Edward Sapone, told the judge. “He’s strayed from the path. There is a way to move past it, and that’s what he wants to do.”

A third defendant, former Chief Financial Officer Gregory Maleski, 41, of Massapequa, New York, pleaded guilty to scheming to defraud and falsifying business records and was sentenced to five years’ probation.

The case is New York v. Romano, 00051/2014, New York State Supreme Court, New York County (Manhattan).

(Corrects length of sentence in headline in story published Dec. 15.)
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