2003-06-23 -- Romano, Louis -- Sentencing -- News Release

Former N.J. Securities Broker Sentenced to 27 Months in Prison for Defrauding Clients of $400,000

NEWARK - A former licensed securities broker with Seaboard Securities in Florham Park was sentenced today to 27 months in prison for his role in a scheme that defrauded investment clients of nearly $400,000, U.S. Attorney Christopher J. Christie announced.

U.S. District Judge Dickinson R. Debevoise also ordered Romano to serve three years supervised release and to pay nearly $400,000 in restitution to his former clients, according to Assistant U.S. Attorney Michele Brown.

Louis Romano, 60, of Madison, admitted at his plea hearing in March of this year that beginning in 1986 and continuing for more than a decade, while he was a employed as a Seaboard Securities broker, he devised a scheme to swindle his existing brokerage clients by converting their investment funds for his own personal use, according to Brown.

Romano admitted that he convinced customers to pay for the purported legitimate investments with personal checks made out to cash or to Romano personally. Other customers, he said, he convinced to sell their existing legitimate securities to give to him for further investment. As part of his scheme, Romano falsely represented that the stocks and bonds he was recommending were high-yield, safe investment opportunities for long-term investment.

At sentencing, U.S. District Judge Dickinson R. Debevoise characterized the defendant's conduct as "despicable," and found that Romano had dissipated his friends and neighbors' life savings, college education funds, baptism gifts, retirement funds, and rainy day savings. Three of the defendant's victims were present in court for the sentencing hearing. Judge Debevoise ordered Romano to make full restitution to the victims of his offense after serving his term of imprisonment. Judge Debevoise also ordered Romano to surrender to the Bureau of Prisons to begin his term of imprisonment on Aug. 4, 2003.

Romano was indicted last October on two counts of mail fraud. According to the Indictment, Romano allegedly induced his customers to pay for these securities in cash or by check made out to him, explaining that they would be purchasing a small share of a much larger investment. Romano explained that he would be investing his clients' funds in Seaboard "house accounts" or "street accounts," and for that reason they would not receive monthly account statements for these investments, according to the Indictment. In fact, his customers would receive no monthly statements because no investments were made for them by Romano.

According to the Indictment, as proof of the customers' investments, Romano provided his customers with "bond powers" or "stock powers" which purported to indicate that a securities investment had been made on their behalf, according to the Indictment. In fact, Romano is charged with fabricating these fraudulent documents, which are not proof of any investment.

In order to conceal his fraudulent activity, Romano provided his customers with reassurance, and made periodic payments to a number of his customers as if he were actually providing them with returns on their investments.

Christie credited agents of the FBI, under the direction of Special Agent in Charge Louie F. Allen, with bringing the case against Romano.

The Government is represented by Assistant U.S. Attorney Brown, of the U.S. Attorney's Office, in Newark.

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Defense Attorney: John Whipple, Esq., Morristown