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Investment salesmen given prison time

TAMPA — Four men were sentenced to federal prison Friday for their part in the fraud scheme led by boy-band impresario Lou Pearlman.

Michael J. Crudele, 50, of Lithia; Steven B. Rodd, 45, of Tampa; William P. Kress, 55, of Largo; Gary V. Leone, 58, of Valrico, had all been barred from selling unregistered securities in Florida when they began selling Transcontinental Airlines Inc. Employee Investment Savings Account.

The investment was ultimately a fraud orchestrated by Pearlman, the U.S. Attorney's Office in Tampa said.

Pearlman, founder of the 1990s boy bands Backstreet Boys and N'Sync, pleaded guilty in 2008 to making up the security to be traded as a part of a Ponzi scheme. He is serving a 25-year term in federal prison.

Prosecutors said there was no evidence to show the four Tampa-area defendants knew the security was a fraud, but they admitted to not telling clients they were unlicensed, banned and that the investment was under state investigation.

Together, they brought in $35 million from more than 350 investors. Crudele, Rodd and Kress were sentenced to three years in prison and ordered to pay tens of millions in restitution to defrauded investors. Leone was sentenced to 26 months in prison and ordered to pay $663,408 to defrauded investors. The judge also ordered all four men to forfeit proceeds valued at $5.46 million.

Investment salesmen given prison time 12/09/11 [Last modified: Friday, December 9, 2011 8:45pm]
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