Judge Tosses Conviction In Bank Fraud
A federal judge has thrown out the conviction of a man charged in the first criminal securities prosecution brought in connection with an initial public offering in a bank conversion.
John Lucarelli of Greenwich and three other men were charged in a $4.9 million scheme to make "easy money" when New Haven Savings bank converted to a public bank called NewAlliance in 2004, authorities said.
Lucarelli was convicted last year on two counts involving charges he illegally profited off the IPO. Only account holders were eligible to purchase stock, but prosecutors said Lucarelli paid account holders to buy stock for him so he could sell it at a profit.
The scheme involved so much stock that about 2,100 legitimate account holders could not buy as many shares as they wanted, prosecutors said.
U.S. District Court Judge Janet Bond Arterton acquitted Lucarelli on Thursday of the two counts, determining the jury did not find he acted with specific intent to defraud the bank or its depositors.
The jury had been asked that question, but Arterton said it "misunderstood, or was not adequately guided by" her instructions on what had to be proved in order to convict Lucarelli on the charges.
"And, with the 20/20 vision of hindsight, the court agrees ... that the charge was insufficiently tailored to the novel circumstances of this prosecution," Arterton wrote in her decision. "Accordingly, the language of the court's charge, while technically correct, did not suffice for purposes of adequately guiding the jury in a case such as this one."
Prosecutors said they were reviewing the ruling to determine whether to appeal.
"We're all gratified by the decision," Lucarelli's attorney, Robert Fiske Jr., said Friday.
The other defendants have pleaded guilty, with one sentenced to probation and the other two awaiting sentencing, authorities said.
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