The defendant’s pump-and-dump scheme artificially inflated stock prices before he sold off the shares, leaving honest investors holding worthless stock,” Cyrus R. Vance Jr., the Manhattan district attorney, said in a statement after a jury convicted Mr. Margulies on 30 criminal counts. Mr. Vance noted that the victims included a teachers’ pension fund in Ohio and a Methodist church.
As for the cooperator, John D. Mazzuto, his deal is now in jeopardy because he picked up a DUI which violates his agreement. When he pleaded guilty in January, the fraud was only $60 million. How did it get to $100 million?
Vance's office agreed to a 1 to 3 year sentence for Mazzuto. Margulies is now facing 25 years. Freedom is a commodity far more precious than money. The incentive to lie -- and tell the truth as the Government sees it -- is enormous.