Suspected Gambino Broker Charged
NEW YORK (AP) _ A fugitive stock broker who allegedly stole more than $2 million from reputed mobster Thomas Gambino and his family now faces civil charges from the Securities and Exchange Commission.
The SEC brought the charges Monday against Mohammed Ali Khan, 34, who last week was charged criminally with fraud by state and federal authorities.
The SEC said Khan, of Jersey City, N.J., broke securities laws shortly after the 1996 opening of Klein Maus & Shire, a now-defunct brokerage firm at 110 Wall St.
As president of the firm, Khan allegedly directed a private sale of preferred stock in which he told prospective investors that the firm was a full-scale investment bank when it was staffed by only a few professionals and had few business activities, the SEC said.
Khan also told prospective investors that the firm had assets of $27 million when it actually had assets totaling less than $1 million, the SEC said in court papers filed in U.S. District Court in Manhattan.
Last week, Khan was charged by the state attorney general’s office with grand larceny for allegedly stealing more than $1.26 million from five clients, including Gambino.
Gambino and several members of his family have sued Klein Maus & Shire and one of its brokers, Maurice Gross, alleging the family was cheated out of at least $2 million and maybe as much as $4 million by the firm.
Authorities say Khan has fled, probably with the help of others, and is now a fugitive.
A federal criminal complaint last week charged Kahn with securities fraud for allegedly selling $2.7 million worth of his firm’s preferred stock to 55 investors by making false claims.
If convicted on criminal charges, Kahn could face up to 10 years in prison on federal charges and up to 15 years in prison on the most serious state charges.