Roy Ageloff was convicted in August 2001 for his role in a massive securities fraud scheme which allegedly had ties to the Genovese crime family, and after nearly a decade in prison the swindler is preparing for his December 2013 release by looking for a woman through an online dating service for prisoners as reported by Mitchel Maddux for the New York Post: "'What good is it to be king if you have no queen?' Ageloff, a Brooklyn native, asks on the Web site Prison Inmates Online."
Ageloff and his cohorts were engaged in "pump and dump" schemes by which they used high pressure sales tactics to sell stocks at fraudulently inflated prices to unsophisticated investors.
An appellate court which ruled that Ageloff must compensate his victims for their $190 million loss described the operation as follows:
From 1991 to 1998, Ageloff and his partner Robert Catoggio controlled four securities brokerage firms: Hanover, Sterling & Co., Ltd., Norfolk Securities Corp., PCM Securities, Limited, L.P., and Capital Planning Associates, Inc. The racketeering activity in each of these four firms followed a similar pattern. Defendants acquired control over large blocks of stock and stock warrants of various small start-up companies, as well as companies that did no business at all (referred to in the indictment as "house stocks"). Defendants often acquired these house stocks cheaply, sometimes by paying kickbacks to the principals of the stock issuers or in other improper ways.
After acquiring the house stocks, defendants used various methods to create artificial market demand for those stocks. For example, the brokerage firms would pay large undisclosed commissions (as high as 20-30% of the price of the stock) to brokers based on the amount of the particular house stock a broker sold. These large commissions, which were not paid to brokers for selling non-house stock or for buying house stock from consumers, encouraged brokers to aggressively tout the house stocks to the public. Brokers routinely informed customers that a nominal commission or no commission would be charged.
In addition, Ageloff and his co-conspirators used high-pressure sales tactics and misleading statements to persuade customers not to sell house stocks. They would praise the business prospects of the house stock companies, even though many of the companies did little or no business, and would assure their customers that the price of the house stocks would rise rapidly. To maintain the appearance of demand, brokers would often either fail to take and execute customer orders to sell house stocks or execute such a sale only if it could be "crossed" with a purchase of the same stock by another customer.
This scheme worked for a number of years. As the price of the house stock rose, Ageloff and his co-conspirators would sell their shares for substantial profit. However, in 1997, the Federal Bureau of Investigation began to investigate the business practices of all four firms. That investigation led to the indictment of 55 defendants, including Ageloff, for participating in the scheme outlined above.
A man with a briefcase can steal more money than a man with a gun as the old saying goes.