13 Indicted in Boiler-Room Operation

(CN) - A former SEC employee and a dozen other men bilked dozens of elderly investors for $12 million in a boiler room scheme, federal prosecutors claim in Manhattan. Steven Kimmel and cohorts are accused of conspiracy, wire fraud and securities fraud: selling interests in Kimmel's so-called media company, Realcast, through other offices in New York.

Kimmel founded Florida-based Realcast in 1999, allegedly to provide Internet video and live broadcasting services, according to the 18-page indictment.

But starting in 2000, he and his cohorts used Manhattan offices for companies called Powercom Energy Services, and Empire Energy Services (Powercom/Empire) to solicit investments by telephone and mail for Realcast and other media companies, according to the indictment.

The men told their victims they were selling shares directly so as to charge no commissions, or a maximum of 10 percent, though "Powercom/Empire was in fact collecting at least 40 percent of the investors' investment as commission," the indictment states.

One defendant said he was "comfortable" telling a sucker that shares would soon sell for $8 to $18, then told a co-conspirator that his "'mother will come out of the grave' before Realcast is a successful company," according to the indictment.

Charged with Kimmel were Anthony Guarino, William Dick, Lance Barbarino, Gabriel Almandi, Ciro Cozzolino, Isaac David, Salvatore Guarino, Peter Sharpe, Jamil Fuller, William Rothlein, Christopher Savino and Alex Lemberg.

Their next hearing is set for Sept. 13.

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