Fallout From Busted Boiler Rooms

A recent, unpublicized indictment in Florida (nope, no web links available) is a good example of how boiler room crooks manage to keep their ill-gotten gains, even after they've been thrown in jail.

The feds recently indicted a fellow named Roy Ageloff, who was prominently featured in my book Born to Steal. Ageloff ran the Hanover Sterling boiler room and other crappy little firms that sold "chop stocks" -- worthless stocks sold at high prices to retail investors, with brokers compensated by undisclosed kickbacks.

The SEC and NASD pursued this guy long after the investors were fleeced, because, in addition to their usual incompetence, they were obsessed with "naked shorting" of the Hanover stocks. The FBI only stepped in after my Business Week articles in late 1996, which disclosed how Hanover and other firms had mob links.

Ageloff pleaded guilty to felony counts for his crimes and spent two years in prison.

Now, here's where it gets good. A new indictment, handed up recently in Flordia, accuses Ageloff of successfully hiding assets, to avoid a restitution agreement. With the alleged help of his brother, he supposedly did that by putting the money into movie deals and other ventures. He also sent the money overseas.

Ageloff has pleaded not guilty and is vigorously fighting the charges. Apparently whatever money he had is not accessible, as he's been using the services of the public defender and defending himself pro se.

The thing that strikes me about this indictment is not that Ageloff is accused of these things, but that he did a lot of it while in prison. While behind bars he had access to "telephones, e-mail, mail and visits." I guess such things are monitored, or if they are they are monitored by dopes.

The end result is that the people who were ripped off by Ageloff and his crews got bupkis.

© 2008 Gary Weiss. All rights reserved.