Vincent "Chin" Gigante in photo
A longtime associate of the Genovese organized crime family has pleaded guilty to securities fraud for selling $2.1 million of worthless stock, according to federal officials.
Frank Schwamborn, 48, of Farmingdale, took over a Ronkonkoma company, called World Cyberlinks, which had been set up to produce docking stations for Palm Pilots, but which did not actually make any products, officials said.
Schwamborn had the company transfer stock to a number of companies he had bought or set up in return for services, officials said. He took control of these companies using money he made selling cocaine, federal prosecutors said.
The companies never performed any services for the Cyberlinks company, officials said. But the stock transfers were backdated to get around the rule requiring that stock used to pay for services had to be held for a year before they could be resold, officials aid.
Among the companies, which prosecutors say are now out of business: Burdette Ltd., on the Isle of Man; Puritan Management of Bay Shore; FRF Holding of North Babylon , and Candles, a restaurant in Bay Shore that also was known as Park 70 Bistro and Giovanna's.
Schwamborn has been held in jail without bail awaiting trial on the charges because of a history of threats made against agents, police officers and state and federal prosecutors involved in the case and other investigations, officials said.
A postal inspector said in an affidavit at the time of Schwamborn's arrest that he was an associate of organized crime who had his own crew, which was "a collection of thieves, drug dealers, prostitutes, 'leg breakers,' and stockbrokers."
A number of stock investors, who were possible witnesses against Schwamborn, had been asked to move ...