|U.S. Attorney’s Office October 20, 2011|
Defendant Alan Labiner pleaded guilty today before United States District Judge Brian M. Cogan in federal court in Brooklyn to conspiracy to commit securities, mail, and wire fraud for operating a boiler room in Brooklyn. This is the second guilty plea in this four-defendant case. The plea was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York.
The indictment and other filed documents in the case charge that from 2004 to 2009, the defendant and his co-conspirators took in more than $6 million from at least 50 investors, including from Individual Retirement Account funds of senior citizens, by selling fraudulent securities in four different investment schemes:
- Manhattan North Real Estate Investment Trust, Inc., a purported real estate investment trust that claimed to invest in real property in upper Manhattan;
- Next Point USA, Inc., which purported to invest in credit cards with high interest rates;
- Grant Boxing, Inc., which purported to sell boxing equipment and clothes; and
- Exposure Management Group, which purported to manage and promote popular musicians, models and actors.
In each scheme the defendant and his co-conspirators allegedly induced investors to send money by lying about the companies and subsequently commingling and misappropriating the investors’ money. The defendants then spent the investors’ money on personal expenses, including strip clubs, tanning salons and car washes.
The defendant faces a maximum sentence of five years’ imprisonment.
In announcing the guilty plea, Ms. Lynch expressed her grateful appreciation to the U.S. Postal Inspection Service, New York, the agency which led the government’s investigation, and thanked the Federal Bureau of Investigation and the Securities & Exchange Commission for their assistance.
The government’s case is being prosecuted by Assistant United States Attorneys Michael L. Yaeger and Ameet Kabrawala.