A reputed Gambino crime-family associate who headed a $20 million stock scheme admitted this morning that he wagered some of his proceeds in illegal gambling operations, reports NyPo.
Michael Scarpaci, 34, pleaded guilty to racketeering tied to his roles in an Internet sports-betting ring and high-stakes poker games.
He agreed to serve up to 30 months behind bars in addition to the five years he faces for running the bogus "Gryphon Financial" investment firm, which duped investors through a "boiler room" located in a Staten Island strip mall.
There is a lot of mob activity on Wall Street, more than most realize, especially in the penny stock market. The reason for this is pure and simple. There are so many regulations that it makes it very difficult for a legitimate businessman to raise money at the penny stock level. Because of all the regulations it becomes to expensive and you can only do it by cutting the legal edges.The only ones willing to take this risk and break the law are the mobbed-up guys. Since these characters aren't afraid to ignore the SEC, they are also very likely willing to ignore your complaints, once they have your money.
The solution is to eliminate the SEC, and free up the small cap markets so that legitimate businessmen can access that market. The mob wouldn't have a chance against legitimate businessmen who could tell their story, without the hassles of the huge regulatory environment that the mob just ignores.
Whenever the government super regulates an industry, the bad guys move in. Another example, is the street drug business. If street drugs weren't illegal, you would literally have grandmothers selling the drugs as clerks out of store front operations. In California, for all practical purposes marijuana can be purchased legally, if you have a "medical need." Street store marijuana shops are opening up everywhere. Instead of weed being sold by gang bangers in edgy neighborhoods, the stores have clerks that look no different from those you see in other shops.
Super regulation simply attracts those who are willing to ignore the laws, and who are willing to shoot it out if they have to. These guys play an entire different ball game.
That the SEC regularly busts so many mob related operators is indication alone that the securities regs are so intense that it is keeping the good guys out and attracting those who will ignore the regs. If the SEC was abolished tomorrow, the entire nature of the penny stock business would change.