Tuesday, October 16, 2018
News Roundup

Tampa pair joins Arthur Nadel and Lou Pearlman on list of financial rogues

The motives behind some financial crimes are easier to stomach.

The impoverished mom steals her neighbor’s credit card to buy groceries. The owner of a struggling auto repair shop jiggers the books to pay less taxes. A drug addict pawns a stolen lawn mower to feed his habit.

Criminal, for sure. But the rationale is understandable: Financially desperate people making bad choices.

Then there’s the criminally greedy. The already rich who can’t resist temptation. The privileged who risk everything for a few more dollars.

Less forgivable.

You can add Tampa Bay’s Andrew Berke and Walter "Chet" Little to that list.

For two decades, Berke and Little worked hard to rise up in their respective fields. Berke, with his MBA from Northwestern University, founded a trucking logistics company, Freight Ready, that he later sold to Hillsborough County-based BlueGrace Logistics. He joined BlueGrace as an executive and helped the shipping management business become Inc. magazine’s 20th-fastest private growing company.

Little was a $400,000-a-year partner in a top Tampa firm. His wife, the chief financial officer at another firm, also earned six figures.At one point, the couple owned two Apollo Beach homes in the upscale Mirabay development.

It was there that the two men met and in 2013 hatched an insider trading scheme, a tale well told by senior correspondent Susan Taylor Martin in Sunday’s Tampa Bay Times.

The condensed version: Little used confidential information about pending company mergers from his law firm’s databases to make stock picks. Berke knew, went along, and even paid kickbacks to Little for the inside information. The U.S. Securities and Exchange Commission noticed. The FBI showed up. Both men were charged.

The scheme netted the men more than $1 million. Prosecutors described Little’s conduct as "particularly egregious," spurred on by greed.

It’s the same motivation that has felled so many of Florida’s high-profile financial criminals.

Sarasota money manager Arthur Nadel turned to crime in the 2000s, pocketing $100 million and then took off when the Ponzi scheme imploded in 2009. Nadel, who pleaded guilty and received a 14-year sentence, died in prison.

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Todd Farha was earning millions of dollars as the CEO of Wellcare Health Plans before he and other company executives bilked Medicaid by overstating what the Tampa-based company spent on mental health patients. Farha was convicted in 2013 and agreed to pay $12.5 million to the SEC and $7.5 million to Wellcare. He gets out of prison later this year.

Up-and-coming financial manager Michael Szafranski told the judge in his case that greed turned him into a "despicable person. "I come before you ashamed, embarrassed and humiliated by my actions," he said in 2015. Szafranski helped lure victims, including some in the Tampa Bay area, into Scott Rothstein’s $1.2 billion financial scheme. Szafranski pleaded guilty in 2015, paid back $6.5 million, and received a short prison term.

Matt Aldissi and his wife Anastassia Bogomolova —†both accomplished scientists with Ph.D.s and no criminal history — swindled the government, fraudulently securing $10 million in research grants. They both went to prison in 2015 for more than 10 years, leaving her 13-year-old son behind.

There are many other Florida examples. The local Little League baseball president who dipped into the league account. The treasurer who stole $11,000 from a high school booster club. Remember Lou Pearlman? He’s the Orlando boy-band producer behind one of the longest running Ponzi schemes in U.S. history.

In the insider trading case, Berke cooperated with the feds, pleaded guilty to one count of conspiracy to commit securities fraud and received four months of house arrest. He remains at BlueGrace.

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Little pleaded to the same charge and was sentenced to 22 months in prison. He’ll likely lose his law license.

They both now join the local financial riffraff Hall of Fame.

Contact Graham Brink at [email protected] Follow @GrahamBrink.

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