ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Wednesday, May 8, 1996 TAG: 9605080055
SECTION: BUSINESS PAGE: B-6 EDITION: METRO
DATELINE: WASHINGTON
SOURCE: Associated Press|
Federal regulators on Tuesday filed a fraud case against 14 stock promoters and four companies who pitched nearly $19 million in investments in wireless cable-television systems and radio stations.
The Securities and Exchange Commission case alleges more than 1,000 investors were defrauded out of about $15 million in sales of securities for wireless cable-television systems between late 1992 and May 1994.
Wireless cable refers to a technology that broadcasts television signals to communities through the airwaves instead of cables; the SEC has warned investors about widespread fraud in such investments.
The suit filed in U.S. District Court in Newark, N.J., also charges that investors were defrauded out of $3.7 million in investments in radio stations promoted by Sonny Bloch, the financial talk show host who has pleaded guilty to federal tax evasion and perjury.
The SEC obtained settlements with five people and one company. Those agreements call for repayment of $1.8 million. Cases against the remaining defendants are pending.
Alan Herr and Herbert Herr, both of New York, and Stanley Mindel of New Jersey were charged with participating in the sale of unregistered securities in two wireless cable companies. The firms are Southern Tennessee Wireless Limited Liability Co., a broadcast system in Hohenwald, Tenn., and Greater Columbia Basin Wireless Limited Liability Co. in Kennewick, Wash.
Alan Herr and Herbert Herr were convicted and imprisoned in the 1980s on commodities fraud charges. Mindel was convicted of federal securities fraud in 1965 and tax fraud in 1973, the SEC said.
The Tennessee case raised $6 million from several hundred investors, while the Washington case raised about $9 million from 800 investors, the SEC said. The promoters were charged with misleading people about the risks and projected investment returns and improperly using investors' money.
In addition, Alan Herr and Stanley Mindel are charged with engaging in fraudulent sale of securities of Bloch Broadcasting Cos., as well as $3.8 million in sales of securities in three limited partnerships for related radio stations.
In their settlement, Alan Herr agreed to pay about $520,000 in illegal profits; Herbert Herr, $406,000; and Mindel, $548,000. They didn't admit or deny the SEC's allegations in the settlement. Their attorney declined comment.
Also agreeing to settle was Philip J. Caratozzolo of Florida, president of Nationwide Wireless Corp. Nationwide played an organizational role in the Washington wireless cable case, the SEC said. The SEC charged Caratozzolo with acting as front man for the promoters of the Greater Columbia Basin offering.
In his settlement, Caratozzolo was ordered to repay $180,000 in improper profits, but the payment was waived because of financial hardship. Attorney Richard Harris said Caratozzolo ``had a very limited involvement'' in the case.
The fifth person settling was Philip Forma of New Jersey, president of Future Vision Direct Marketing Inc. of Midland Park, N.J., a telemarketing firm that sold two of the wireless cable offerings. In 1983, Forma was convicted of criminal securities fraud in federal court in New York, the SEC said.
Forma was ordered to repay $336,000 in improper profits. His attorney couldn't be reached for comment.
LENGTH: Medium: 67 linesby CNB