By Shayna Jacobs
DNAinfo Reporter/Producer
MANHATTAN SUPREME COURT — An ex-CEO of a holding company and an attorney bought several exclusive homes, a Harry Winston diamond ring and trips on private jets with the more than $60 million they made in a stock scam, prosecutors said Tuesday.
Former corporate executive John Mazzuto, 61, allegedly gave phony stocks to friends, family members and institutions, including his alma mater Yale University, which named a baseball field in his honor.
The gifts were part of a ploy to raise the value of the shares, so he and attorney James Margulies, 45, could cash out on worthless stocks and mask their activities by funneling what appeared to be legitimate earnings back into their company, Industrial Enterprises of America, Inc., and its subsidiaries, prosecutors said.
With profits, disguised as real through the "shell companies" they operated, the duo bought a $3 million Southampton estate, a $2.5 million home in Florida and $350,000 piece of jewelry for Margulies' wife, according to the district attorney.
The alleged scammers, through penny stocks, "allowed people with criminal intentions to fly under the radar and manipulate and illegally inflate its value," said Assistant District Attorney Garrett Lynch.
Mazzuto, a Palm Beach resident, was held on $2 million bail and his alleged accomplice was freed, pending his next court date.
