Stockbroker Pleads Guilty to Stock Fraud Conspiracy

newark.fbi.gov, Feb 02, 2007

A stockbroker pleaded guilty today to his role in a scheme to manipulate the stock market and defraud investors, many of whom resided in New Jersey, U.S. Attorney Christopher J. Christie announced.

Robert M. Montani, Jr., 45, of Valley Forge, Pa., pleaded guilty before U.S. District Judge William J. Martini to an Indictment charging Montani with conspiracy to commit securities fraud and wire fraud. Montani admitted that while working as a stockbroker and compliance officer at his former employer, Bryn Mawr Investment Group/Valley Forge Securities, he agreed with his boss, Tonino Labella, and other brokers to manipulate the price of two publicly traded stocks.

Opening arguments were scheduled to begin this morning for Montani’s trial on the charges until he elected to plead guilty. Labella pleaded guilty in federal court on Oct. 26, 2006 to the same conspiracy charge as Montani and a separate count of wire fraud. Labella awaits sentencing.

After the criminal activity but before the federal Indictment was returned in January 2005, Montani opened and owned his own brokerage firm, Valley Forge Investment Group, which he still runs in Rosemont, Pa. The Montani firm is at the same address as the brokerage referred to in the Indictment.

At his plea hearing today, Montani admitted that he convinced his family friends and golfing partners, among others, to invest in stocks that he knew his boss owned and manipulated, and that he skimmed an undisclosed 30 percent commission off the top. Montani also admitted that he moved his illegal gains offshore and then provided falsified documents to the IRS to avoid paying taxes on the excessive commissions that he had stashed in the Bahamas. Read more at fbi.gov