NEW YORK (Reuters) - Zvi Goffer could have passed for Tony Soprano when he warned confederates in his alleged insider-trading ring that “someone’s going to jail.”
Don’t be too obvious about making big money, he said in a cell phone conversation intercepted by investigators in February 2008.
“Someone’s going to jail, going directly to jail, so don’t let it be you, OK?” Goffer said, according to a criminal complaint. “That’s a ticket right to the (expletive) Big House.”
According to federal prosecutors, Goffer was the boss of an insider trading operation that paid sources for non-public information. He and 13 others were charged on Thursday as the scandal centered on Goffer’s former employer, hedge fund Galleon Group, widened dramatically.
A criminal complaint naming Goffer, head of the trading firm Incremental Capital, and his alleged accomplices reads like a script for TV dramas like “The Wire” or “The Sopranos,” in which drug and Mafia criminals try to stay one step ahead of the law.
Federal prosecutor Preet Bharara told a news conference that investigators resorted to wire taps and other methods “traditionally reserved for the mob and narcotics traffickers” when the accused began “taking a page from the drug dealers’ playbook (and) deliberately used anonymous, hard-to-trace, pre-paid cellphones in order to avoid detection.”
Calls recorded by law enforcement officials were littered with nicknames like “the Greek” and “the Rat,” and even jokes about getting information from a guy fixing a pothole. Current and past targets were code-named the “Hilton hit” and the “Apple.”
There was talk about “cash lying around,” and investigators observed what they believed were hand-offs of white bags and cases packed with cash.
In one phone call, an attorney, Jason Goldfarb, who was charged on Thursday, told Goffer that he had a meeting with the “boys” planned, but added they were like “nervous nellies.”
The “boys,” according to prosecutors, was a reference to people sharing information with the alleged ring.
Goldfarb said the “boys” were “hungry” because one had recently “spent his whole chunk of change” on his honeymoon and the other had “bought a new kitchen.”
“Now they’re, they’re ready to replenish, and that’s what we’re going to do,” Goldfarb said, according to the complaint.
Much like the drug traffickers in “The Wire,” those accused in the insider-trading ring were constantly paranoid about a potential “rat” who would talk to the authorities.
In the end, all their precautions didn’t work.
“When sophisticated business people begin to adopt the methods of common criminals, we have no choice but to treat them as such,” Bharara said.
Reporting by Steve Eder; editing by John Wallace