Broker who bamboozled Merrill gets jail time
The broker who conned Bank of America Merrill Lynch into lending him nearly $800,000 as a recruitment incentive – then promptly resigned from the firm and made off with the cash – will be spending the next few years in jail.
The broker who conned Bank of America Merrill Lynch into lending him nearly $800,000 as a recruitment incentive – then promptly resigned from the firm and made off with the cash – will be spending the next few years in jail.
Steven Mandala, who pleaded guilty May 19 to grand larceny and identity theft, was sentenced Wednesday in New York state Supreme Court to two to six years in prison as a result of his actions.
In announcing the sentence, Manhattan District Attorney Cyrus R. Vance, Jr., noted that Mr. Mandala must repay $360,000 in restitution. Last month, the broker forfeited a Ferrari he purchased with some of the ill-gotten money. The sports car was valued at around $250,000.
Prior to applying for the job at the Bank of America Corp. unit in 2009, Mr. Mandala was a stockbroker with the Maxim Group. In that position, he apparently earned a salary of $100,000. But the 29-year-old Mr. Mandala told Merrill he was a partner at Maxim. He also used bogus documents — including false pay stubs, tax returns and W-2 forms — to convince Merrill that he was a top producer at the firm and could bring in business worth more than $1 million a year. The broker also told his future employer that he managed $300 million worth of assets and generated $1.5 million for Maxim, Mr. Vance said.
To persuade Mr. Mandala to join the firm, Merrill then offered him the forgivable loan. Typically, such loans are only proffered to potential hires who are top performers at their firms.
But Mr. Mandala was far from a stellar performer at either firm. He frequently did not show up at his job. What’s more, he brought in only a couple of small-player clients at Merrill. In June, after just two months on the job, Mr. Mandala informed Merrill — by e-mail, no less — that he was resigning. He told the firm to discard his personal effects and did not mention repaying the loan.
[This story was supplemented with reporting from the Associated Press.]
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