Justice hard to find for South Florida investment victims, but swindler will be home for holidays

By Dan Christensen, BrowardBulldog.org

There is no justice for Marion Green and others victimized by stock broker and swindler Gary J. Gross.

He fleeced dozens of his clients from across South Florida, many he worshiped with at a Boca Raton synagogue. Their total losses were as much as $20 million. Federal arbitrators ruled Gross should pay three-dozen of his victims $7.5 million. Other big dollar awards were imposed against him, too, but so far no one has seen a dime.

The FBI added some salt to the victims wounds in 2009 when it notified the victims that its criminal investigation had been dropped without referring the matter to the U.S. Attorney’s Office for prosecution. No explanation was given.

Green, 81, turned to the FBI hoping to get help on whether she could speak at Gross’s sentencing for misdeeds in an unrelated bank fraud case.  She says she called the case agent repeatedly, but got no calls back. Finally, she drove to the FBI’s West Palm Beach office. The agent would not come out to meet with her.

Green said she wanted the judge to hear her story of how because of Gross she has been forced out of retirement to work as an interior designer and Realtor. She now supports herself and her husband, Martin, 85, a retired film editor for 60 Minutes. Others in her family were also victimized.

“I wanted to talk to the judge and tell him what this man did,” she said.

Her attorney tells a similar tale.

“I could have paraded probably close to a dozen clients who would have liked to explain to the court how Gross’s misconduct changed their lives – where their kids could go to school, the kinds of places they live in,” said Green’s Boca Raton attorney, James Sallah. “We were never asked…My calls to the U.S. Attorney’s Office were never returned.”

SWINDLER HOME FOR THE HOLIDAYS

Rather than take up the cause of Green and others that the U.S. Securities and Exchange Commission determined were taken advantage of by Gross, the FBI and federal prosecutors pursued charges he defrauded a bank.

Last week, U.S. District Judge Kenneth Ryskamp allowed Gross to go home for the holidays before spending 27 months in prison in the bank fraud case. The judge ordered Gross must report to prison on or before Jan.  6.

Ryskamp also ordered Gross, 59, to pay $215,399 in restitution to the bank.

Gross’s lawyers said in court papers that he is destitute.

Though the case was about bank fraud, Gross’s sprawling investment fraud was at the center of a pre-sentence disagreement. The U.S. Probation Office included details about it in a pre-sentence investigation read by the judge. Gross’s lawyers argued it was “irrelevant,” say court filings.

While that report is confidential, those court papers disclose that it discussed Gross’s practices at the synagogue.

While working at the now closed Boca Raton office of Axiom Capital Management, Gross employed a variety of abusive sales practices, including unauthorized trading in penny stocks, to run up enormous commissions for himself.  He hid it for a while by doctoring account statements, said the SEC, which banned him from the  stock trading business in 2008.

Many former clients have said they trusted Gross because of his devotion to Orthodox Judaism. He sometimes wore his prayer shawl to the office.

But he also displayed the signs of success. He wore expensive clothes, drove a Jaguar XJ; and lived in a luxurious 10,000 square foot home with a country club membership at the Boca Raton Polo Club. He bought clients show tickets and took them expensive dinner at fine restaurants.

About 100 former Axiom clients, including actor Henry “The Fonz” Winkler of TV’s Happy Days – later became Gross’s creditors when he filed for bankruptcy in 2007 after another client arbitration award of $418,000.

When the pre-sentence investigation brought up the investment fraud, Gross’s South Florida lawyers – Jon Sale, Benson Weintraub, and Jon May – vigorously sought to counter it. They stuffed the court file with testimonials detailing Gross’s practices as an Orthodox Jew and his “profound sense of goodness and care.”

“The PSI alleges that Mr. Gross ‘targeted’ Jewish investors. Nothing could be further from the truth,” defense court papers say.

Sale told Broward Bulldog in an interview that Gross settled the case brought against him by the SEC because he “couldn’t afford to defend himself” against those civil charges.

AUSCHWITZ V. BUCHENWALD

Likewise, defense court papers cite numerous charitable acts by Gross, including his alleged end-of-life care for a now dead ex-client who also lost money, Murray Chernick. The papers noted Chernick’s late wife was a survivor of Auschwitz.

The reference to the infamous Nazi death camp served as a counterweight to another of Gross’s elderly investment victims, Henry Drabin, who was a survivor of Buchenwald. Drabin and his wife Rosalind, have said they lost over $500,000 after Gross sank their savings into highly speculative penny stocks without their permission, reaping large commissions along the way.

Had Gross gone to trial the government said it was prepared to prove that Gross conspired with a Boca Raton loan broker named Francis “Frank” Santa in 2007 to dummy up applications to obtain four loans from Wachovia Bank – now part of Wells Fargo – that he couldn’t quality for legitimately. Gross used the money for his “personal benefit,” papers say.

A dozen people, including corrupt bank officers and customers – like Gross – of Santa’s Palm Beach Business Consultants have pleaded guilty in the case. One of those defendants, Jeanne Ward, a former investigative analyst for the Broward Sheriff’s Office, received a sentence totaling 33 months.

Sentencing for Santa is set for Thursday, December 1.