Ex-Shearson Lehman Bros. Exec Pleads Guilty in Check-Kiting Scheme
JOHN M. DOYLE
Jun. 19, 1987
NEW YORK (AP) _ A former top executive at Shearson Lehman Brothers Inc. has admitted illegally transferring more than $1 million of the firm's money in what prosecutors say was $19 million check-kiting scheme.
Mark L. Stahl pleaded guilty to four felony counts Thursday before U.S. District Judge Vincent L. Broderick.
He admitted making four fraudulent transactions in which he transferred a total of $1.031 million in Shearson funds to bank accounts he controlled in Boston, Hartford, Conn., and Elizabeth, N.J., between November 1986 and last March.
Stahl, 45, of Manhattan, faces up to five years in prison and a $250,000 fine on each count when sentenced Dec. 9. He remains free on $1 million bond.
A federal complaint said Shearson alerted officials to the missing $19 million after conducting an internal investigation.
Stahl was arrested April 24 while dining at a Manhattan hotel and charged with one count of federal wire fraud, for making an illegal transfer of $395,000 March 19 from one of his financial management accounts at Shearson to his account in Elizabeth.
The complaint said that although Stahl managed to juggle millions of dollars back and forth between his two Shearson accounts to cover earlier transfers to his outside accounts, he failed to do so in the case of the $395,000 transfer.
Stahl also admitted transferring $316,000 to his account in Hartford, $90,000 to Elizabeth and $230,000 to Boston.
Employed by Shearson since 1979, Stahl was fired on the day of his arrest.
At the time, U.S. Attorney Rudolph Giuliani said none of the money Stahl took belonged to Shearson customers.
Assistant U.S. Attorney Herve Gouraige told the judge that Stahl had agreed to make restitution and pay back taxes.
Check-kiting refers to writing checks for money that has not been deposited in an account.