* Defendants sentenced to three- and four-year prison terms
* Three were charged as part of US probe of muni market
* Appeal likely, defendants say
By Basil Katz
NEW YORK, Oct 18 Three former bankers at a unit
of General Electric Co were each sentenced on Thursday to
several years in prison for conspiring to rig bids to invest
municipal bond proceeds.
The men were convicted in May as part of a broad
investigation by the U.S. Justice Department of the $3.7
trillion U.S. municipal bond market. The probe has focused on
rooting out schemes to fix prices and rig bids on bond
transactions, and has ensnared some of the world's largest
The government had accused the three GE Capital bankers of
conspiring with brokers, between 1999 and 2006, to submit
artificially low bids for municipal finance contracts. They were
found guilty of conspiracy to commit wire fraud and to defraud
the United States.
GE Capital is the financial services unit of Fairfield,
At Thursday's hearing, U.S. District Judge Harold Baer in
Manhattan said "corruption and greed was certainly what this
case was about."
Defendant Steven Goldberg was handed a four-year prison
term, while Peter Grimm and Dominick Carollo were each sentenced
to three years.
The sentences were significantly lower than what the
government had requested. Prosecutors had proposed up to 17-1/2
years for Goldberg, and more than a decade for the two others.
The three defendants addressed the crowded courtroom in
turn, each breaking into tears when asking the judge for
Lawyers for the three men indicated in court on Thursday
that they would likely appeal the convictions.
Three former UBS AG executives were
convicted on similar charges in August.
A total of 19 people have been convicted or have pleaded
guilty to charges stemming from the bid-rigging investigation,
the government said in August.
In July, former JPMorgan Chase & Co banker Alexander
Wright pleaded guilty to one count of conspiracy to commit wire
fraud for manipulating the bidding process for a June 2002
Wright and former UBS employee Mark Zaino testified for the
government at the trial of the former UBS executives. Zaino
pleaded guilty in 2010 to bid-rigging charges.
The case is U.S. v. Dominick Carollo et al, U.S. District
Court for the Southern District of New York, No. 10-cr-654.