Former USRN counsel and part owner Marty Weisberg was been sentenced to two years in prison for his role in a securities fraud case. While it didn’t directly involve his role at the company, his ownership stake was brought up during sentencing.
He pled guilty in May to money laundering and conspiracy to commit securities fraud. According to his parole officer report, there were misrepresentations to probation about his interest in United Stations Radio Network.
The money laundering charge is based on Weisberg’s theft of money from an escrow account established on behalf of one of his clients for which Weisberg served as escrow agent. The securities fraud conspiracy charge is based on Weisberg’s involvement with a fraudulent scheme in which he received kickback payments from co-conspirators in connection with the issuance of publicly-traded securities by two of Weisberg’s former corporate clients. The guilty pleas arise from unrelated criminal schemes committed by Weisberg as alleged in two separate indictments, reports the NY Paralegal Blog.
According to the Presentence Investigation Report/parole officer report, the defendant “listed 5% ownership in USRN, purchased in 1984 for $5,000. The defendant estimated its value to be between $2,000,000 and $3,000,000. However, he noted that this business was recently foreclosed upon and no ownership remains.”
From the report: In his letter to Probation, dated March 6, 2013, the defendant further stated, “The last sentence [of paragraph 131] should be revised to reflect that Mr. Weisberg’s stock in United Stations was foreclosed upon (not the business itself) and accordingly he no longer has an ownership interest in the company.”
In fact, investigation by the government has revealed that the defendant transferred his equity share in United Stations to his wife Tracey Weisberg in 2012, prior to his guilty plea.
The defendant’s role in United Stations before and after the transfer of his shares to his wife remains unchanged. Conference calls among members of the Board of Directors of United Stations have been – both before and after the guilty plea – presided over by the defendant, who continues to identify himself as the Secretary of the Board. The defendant kept and maintained the minutes of the Board and shareholder meetings.
The defendant conducts United Stations business in the same capacity after the guilty plea as he did before. In addition, at no time has Tracey Weisberg identified herself as present on any telephonic meetings (or in-person meetings), nor does she appear to be anything other than a straw nominee for the defendant.
Earlier this month, the defendant proctored a shareholder meeting for United Stations. The defendant himself circulated to all the shareholders notices dated May 3, 2013, and it was the defendant who set the agenda – which consisted of ousting a founding Board member. This Board member had for the past year expressed ethical objections to the defendant’s continued active role in United Stations after the defendant had pleaded guilty to two felonies involving fraud.
It was the defendant who gave the “call-in” telephone number to the shareholders meeting via e-mail on the morning of May 16, 2013. Once again, the defendant presided over the United Stations shareholders meeting as Secretary. At no time was Tracey Weisberg identified as being present on the line. The defendant took a voice vote and the targeted Board member was removed from the Board. When there was an attempt to raise other matters at the shareholder meeting, the defendant squelched discussion of those other matters, citing that only the removal of the Board member was on the agenda.
The defendant was the attorney for United Stations for years. Only recently did the company retain an attorney with Morrison Cohen LLP. However, the defendant remains active in the business of United Stations and has not ceased billing it for what he terms “consulting” services; the defendant is believed to have a retainer in excess of $200,000. The defendant is also believed to receive funds from United Stations via an entity not bearing his name, preliminarily identified as “DMBM.”
Eastern District Judge Nicholas Garaufis imposed the sentence on Weisberg, saying his actions were not a lapse of judgment but “calculated frauds and lies” that were based on “greed, plain and simple.”
Weisberg’s sentence also included three years of supervised release, 1,000 hours of community service, a $297,500 restitution order and a $250,000 forfeiture.
Eastern District U.S. Attorney Loretta Lynch said in a statement that “a license to practice law is not a license to violate it… Weisberg’s unbridled greed has led him from the halls of an international law firm to a federal prison cell.”
Weisberg must surrender to the Bureau of Prisons by 11/ 6.
