2002-11-27 -- Dalton, Marcus -- Sentencing -- News Release

Securities Scam Artist Known as "The Grifter" Sentenced to 30 Months in Federal Prison

NEWARK - A former Colts Neck man was sentenced today to 30 months in prison in connection with a RICO securities fraud conspiracy, U.S. Attorney Christopher J. Christie announced.

U.S. District Judge Katharine S. Hayden ordered a restitution hearing for Marcus K. Dalton in 90 days. Judge Hayden said Dalton must turn himself in about six weeks from today to begin serving his sentence.

At his plea hearing in December 1998, Marcus K. Dalton, 49, also known as "The Grifter," admitted violating the Racketeering Influenced and Corrupt Organizations Act (RICO) in connection with selling or promoting at least $80 million in fraudulent securities, including shares in phony wireless cable operations, bridge loans to finance a wireless venture in American Samoa and fraudulent shares in Treasure Chest television, a children's television programming investment.

In sentencing Dalton, Judge Hayden accepted the government's recommendation for a reduction in sentence based on Dalton's significant cooperation in the investigation and prosecution of more than a dozen individuals.

Among those who pleaded guilty in the case was John A. Field III, a former U.S. Attorney in West Virginia, who was sentenced to two years in prison in February 2001. Field was also a former director of enforcement for the U.S. Commodities Futures Trading Commission, the regulatory agency that enforces the investor protection laws that Field was convicted of violating after he left that post.

The case was prosecuted by Assistant U.S. Attorneys John J. Carney, Chief of the Securities and Health Care Fraud Unit, and AUSA James F. McMahon of the same unit.

Dalton also admitted being the criminal mastermind behind the sale of millions of dollars in fraudulent telecommunication ventures, including Northeast Telecom of Freehold, N.J.

Dalton's guilty plea followed the execution of over a dozen search warrants by teams of special agents of the F.B.I. and inspectors of the U.S. Postal Service on "boiler rooms" in South Carolina, California, Florida, New Jersey and elsewhere.

The raids capped a carefully planned operation in which the government's cooperating witnesses, including Dalton, convinced telemarketers with whom they had worked previously to sell investments in a fictitious foreign currency fund. The fund, with an accompanying prospectus, earnings history and slick marketing folder, was created by agents of the F.B.I. and inspectors of the U.S. Postal Inspection Service in coordination with assistant U.S. Attorneys in Newark.

Dalton's telemarketing empire took off in and around 1992, when he established The Wireless Embassy Inc., a California corporation operated out of a beachfront house in South Laguna Beach, Ca. The house, according to the Information to which he pleaded guilty, served as criminal headquarters for Dalton and his national enterprise.

In 1992, Dalton, set out to capitalize on investor interest in Federal Communications Commission (FCC) licenses in Multichannel Multipoint Distribution Systems, better known as wireless cable television stations. Dalton devised fraudulent marketing programs for investors to purchase interests in wireless cable TV stations, which he knew were not viable. The programs were then sold through telemarketing "boiler rooms" according to the Information.

In 1993, Dalton expanded his criminal enterprise by recruiting Northeast Telecom to sell the fraudulent wireless investments. After the Northeast Telecom fraud, Dalton moved on to market fraudulent bridge loans in connection with a Samoan wireless venture, until he and Prager became involved in the fraudulent marketing of the Treasure Chest Television Network.

Christie credited Special Agents of the FBI, under the direction of Louie F. Allen, Special Agent in Charge; U.S. Postal Inspectors, under the direction of Postal Inspector in Charge Martin Phanco. Christie also gave special thanks to the New Jersey Bureau of Securities, under the direction of Bureau Chief Frank Widman, for their cooperation and assistance in the investigation.

The Government is represented by Assistant U.S. Attorneys John J. Carney and James McMahon of the Securities and Health Care Fraud Unit.

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Defense Attorney: Daniel Pell, Esq. York, Pa.