FBI investigating claims that stockbroker stole up to $100 million from clients
Monday, January 28th 2002, 12:00 am
By: News On 6
CLEVELAND (AP) _ A stockbroker suspected of stealing as much as $100 million from clients reportedly told authorities before he disappeared that lax supervision made it possible for him to misappropriate money over a 15-year period.
Frank Gruttadauria, 45, disappeared Jan. 11. The FBI said Monday that the agency had not yet found him.
``I can hardly believe that I could have done this without detection for so long,'' Gruttadauria said in a letter to authorities, according to The Plain Dealer, which said it obtained a copy of the letter.
``The various firms' greed and lack of attention at the senior level contributed greatly to that,'' he wrote. ``Be that as it may, I am unwilling to continue and I'm ashamed and sorry for what I have done.''
Gruttadauria had worked in Cleveland at Lehman Brothers Inc. since October of 2000. The government is investigating reports that about 25 of Gruttadauria's clients may have lost at least $100 million and had their account values falsely inflated by as much as $250 million.
The FBI and Justice Department issued an arrest warrant for Gruttadauria on Friday, charging him with making false statements to a financial institution. Wall Street regulators also are investigating.
Gruttadauria is suspected of having account statements for about 25 wealthy people mailed to his post office box. Then he allegedly forwarded to clients falsified statements that inflated the value of their accounts.
A former client filed a lawsuit against Gruttadauria last week, as did a Cleveland bank that alleged Gruttadauria put his home in his girlfriend's name to keep it out of reach of creditors.
Gruttadauria said in the letter that he acted alone and didn't take the money for personal use. ``This began as an attempt to make up lost monies for customers and mushroomed over the course of time,'' he wrote.
FBI spokeswoman Laurie Fournier said Monday that she could not confirm the authenticity of the letter or comment on its contents.
Lehman Brothers pledged its cooperation in the investigation, but said it couldn't comment on whether investors who lost money might be able to recover it.
``We're working through all that,'' said spokesman William Ahearn in New York. He said employees were going through Gruttadauria's accounts and meeting with clients.
Gruttadauria's mother said she believes her son didn't take money for personal use.
``If there were indeed any misstatements, then, based on what we know of Frank's high character, they could not have been used for his personal gain but instead must have been attempts to cover losses incurred by his loyal clients in their investment activities,'' Elvera Gruttadauria said in a statement Sunday.
Gruttadauria, who is separated from his wife and has three children, ages 12, 15 and 17, lived in a $1.5 million house in suburban Gates Mills. He belongs to two country clubs and has a ski condominium in Elliottville, N.Y.