Long Island Man Admits Participating In Boiler Room Stock Scheme

Department of Justice, Nov 09, 2006

Kevin J. O’Connor, United States Attorney for the District of Connecticut, announced that SCOTT A. CIAPPETTA, also known as Steven Stiles, also known as Steven Markowitz, age 38, of 355 Smith Road, Ronkonkoma, New York, pleaded guilty today before United States District Judge Janet C. Hall in Bridgeport and admitted his participation in a “boiler room” investment scheme that victimized approximately 275 victims of more than $3.5 million. On March 29, 2006, a grand jury returned an Indictment charging CIAPPETTA and four others with 16 counts of securities fraud, five counts of mail fraud, and one count of conspiracy to commit securities fraud and mail fraud. CIAPPETTA pleaded guilty to Count One, conspiracy to commit securities fraud and mail fraud, and Count 12, securities fraud.

“This bogus stock scam victimized nearly 300 individuals out of millions of dollars,” U.S. Attorney O’Connor stated. “Those who violate our nation’s securities laws and victimize investors will be prosecuted to the fullest extent of federal law.”

According to documents filed with the Court and statements made in court, in approximately January 2001, CIAPPETTA, Viktor Novosselov, Igor Malyar and others falsely represented to their victims, including citizens of Connecticut, through “cold calls” that they worked for Blue Square Management (“Blue Square”), a venture capital firm that was in the business of selling securities and specializing in underwriting initial public offerings. In reality, Blue Square was a fraudulent entity with no legitimate operations. CIAPPETTA and the other participants in the conspiracy made unsolicited cold calls and told the potential investors that they could purchase securities in a company called Cash Money Lending Corporation (“CMLC”), another fictitious company that the participants in the conspiracy represented to be an actual company purportedly in the business of managing ATM machines.