Laser Arms Mastermind, Longtime Stock Swindler, Sentenced To 12 Years
NEWARK, N.J. (AP) _ The mastermind of a $2.4 million self-chilling can fraud, who authorities said is cooperating in probes of organized crime backing of penny stock frauds, was sentenced to 12 years in prison Wednesday.
Marshall Zolp pleaded guilty in April 1987 to racketeering for the Lasar Arms case, in which he and 13 people were indicted for bilking investors with plans to introduce a bogus self-chilling beverage container.
Three months later, five defendants who stood trial were convicted. Zolp, the 13th defendant sentenced, did not testify.
Zolp and his co-defendants promoted Laser Arms, incorporated in March 1986, through fake news releases, ads, and shareholder reports to inflate the price. They even staged a phony news conference in New York City. Actors were photographed to portray fictitious executives on company documents.
His plea, part of an agreement to cooperate with the government, was unsealed Wednesday by U.S. District Judge Alfred Lechner Jr. Zolp could have received 20 years in prison.
Assistant U.S. Attorney Robert P. Warren told Lechner of Zolp’s cooperation in a number of stock fraud investigations, some involving organized crime members. Indictments are expected, authorities said.
He said Zolp was used as a ″vehicle″ by mobsters for committing stock frauds, and was ″viewed by a number of people as a person they could franchise to make money for them.″
Zolp’s defense attorney, Raymond Sussman of New York, went farther. He said that mobsters beat Zolp and threatened him to continue carrying out the Laser Arms fraud. Zolp, who was living in the Los Angeles area, is in the witness protection program.
Sussman said that despite a ″track record″ of securities violations, Zolp never meant to perpetrate such an extended fraud as Laser Arms.
Commenting after the hearing, Sussman said mob members kidnapped Zolp, drove him out to Long Island, N.Y., and held a gun to his side, saying he was to be murdered. Instead, they beat him.
″They said, ’This is just a warning. Go back to work,‴ said the attorney. Sussman said his client was manipulated by figures associated with New York-area mob families.
In court, Sussman also revealed that Zolp had provided information to the FBI about members of a ″terrorist group″ jailed with Zolp at the Metropolitan Correctional Center in New York. Prosecutors would not identify the group further, but Sussman said they were two foreigners awaiting deportation who had legal proceedings in federal court in Newark, and that the information was about a possible escape attempt.
Two Sikhs accused of terrorism in India were recently ordered extraditable by a U.S. magistrate here. Zolp has spent the past two years at MCC, where the Sikhs are being held.
The Securities and Exchange Commission has implicated Zolp in at least seven security fraud cases nationwide since the early 1980s.
According to an affidavit by an SEC attorney filed in federal court here, Zolp raised millions of dollars in stock offerings, using aliases, newspaper advertisements and misleading financial statements - living a high lifestyle off the proceeds.
A federal prosecutor two years ago said in court that Zolp ″changes identities as easily as other people change their clothes.″ The prosecutor, then-Assistant U.S. Attorney Faith Hochberg, said Zolp even once dashed across the tops of dinner tables to escape the law.
Zolp served two years in Vietnam, carrying out 60 combat missions before deserting to Europe, where he lived for six years before returning under an amnesty program and developing a drinking problem, said Sussman.
″Jail has taught me fear, fear of ever having to return,″ Zolp told Lechner. ″I stand here shamed today. I stand here disgraced. I am financially insolvent, however I am rehabilitated,″ he said.
But Lechner harshly rejected Zolp’s claim of acting out of character.
″Your conduct has been your character,″ the judge said. ″You are a con man.″