Saturday, November 3, 2007

Wakefield man to plead guilty to federal criminal charges

A Wakefield man who allegedly defrauded more than 250 North Shore investors of an estimated $20 million will plead guilty to federal criminal charges, according to his lawyer.

Frank J. Russo's hearing has been postponed so court officials can work out details of his sentencing, according to Boston attorney Paul V. Kelly. Russo allegedly ran a Ponzi scheme, a fraudulent investment operation that involves paying abnormally high returns to investors out of the money paid in by subsequent investors. In April, the US attorney's office indicted him on 19 counts of mail fraud and one count of investment adviser fraud. Prosecutors say Russo fabricated account statements that showed falsely inflated balances. In 2001, he began transferring his clients' funds, often without their knowledge, to a Los Angeles company called Media Data Corp. He also faces pending civil complaints filed by private investors and the Securities and Exchange Commission.

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