Text Size

Email Post

Print Post

Comments (0)

Save Article

New York City - Wall Street bad boy Ross Mandell was nabbed Wednesday in a $140 million global boiler-room scheme that stretched from Brooklyn to the United Kingdom.

Mandell, who blamed his past troubles with regulators on a cocaine habit, is accused of bribing brokers and pressuring investors to pump up worthless stock in his Sky Capital Holdings.

As Sky was losing millions, Mandell was bankrolling a lavish lifestyle of five-star hotels, first-class travel to London and a decorator to doll up his penthouse apartment at the Trump UN Plaza, the feds say.

And Mandell, 52, of Boca Raton, Fla., used stolen loot to pay for adult entertainment and child care, they say.

Five Sky employees were also charged in the civil complaint, filed by the Securities and Exchange Commission.

Money raised from the eight-year scheme was used to pay off customers who'd lost money to past investments, prosecutors say. And secret back-door payments disguised as loans were doled out to brokers who cold-called customers working off a script provided by Mandell.

In 1995 Mandell was suspended for six weeks from the New York Stock Exchange for unauthorized trading, according to reports. He told The Wall Street Journal that his troubles were due to a drug habit.

"I know that there are some people who refuse to believe that a leopard can change its spots," he told Forbes in 2005. "But [F. Scott] Fitzgerald was wrong. There are second acts in American lives, and I think I'm one of them."

In 2004, the SEC says, Mandell lied to investors when he claimed Sky was about to be sold to a German bank. When the deal fell through, Mandell told the investors the bank wanted him to work there for three years but he couldn't because he is Jewish, the complaint says.

Among those arrested yesterday was Mandell's right-hand man, Stephen Shea, 37, of Brooklyn. Also arrested was Robert Grabowski, 41, a broker from Staten Island.