Sentencing Passed on Stock-Tip Scam Mastermind

by InvestorLawyers on September 30, 2011

in FINRA,Securities Fraud

Kenneth Marsh was sentenced September 20 to 8 years in prison for his role in a “boiler-room” fraud. Marsh was the last of eighteen defendants to receive sentencing for a phony stock-tip scheme that resulted in the theft of $20 million from more than 5,000 investors.

SENTENCING PASSED ON STOCK-TIP SCAM MASTERMIND

Between 2005 and 2010, Marsh, 44, acted as owner and CEO of Gryphon Holdings, which was operating as Gryphon Financial during that time. Gryphon Financial was an investment advisory services company on Staten Island. Using high-pressure tactics, Marsh and his colleagues convinced their victims to pay anywhere from $99 to $250,000 for tips and falsified investment newsletters. According to Judge Jack Weinstein, Marsh used the money he stole to support his extravagant lifestyle which consisted of expensive real estate, cocaine and a Porsche.

In addition to the high-pressure sales tactics, Marsh solicited money from retail investors by using fake names. “Michael Warren” and “Ken Maseka” were, according to Marsh’s scam, previous employees of Lehman Brothers and Goldman Sachs, and were self-made billionaires. Neither Warren nor Maseka actually existed. Marsh was, at one time, a stock broker but he had been barred by FINRA in securities arbitration.

While prosecutors argued for a sentence of 11 to 14 years, Marsh’s attorney hoped for a five-year sentence, citing the short sentences of the other defendants of the fraud which ranged from as short as 3 months to as long as 25 months. Marsh’s ex-wife received only 3 months, but the Judge said her sentencing was greatly affected by the fact that she is the primary caregiver for their son, who is just three years old.

Marsh was hopeful that he would receive a lesser sentence when his attorneys asserted in court that he had multiple personalities and was delusional. According to Columbia University psychiatry professor Maurice Preter, “There was Mr. Marsh… there was Little Kenny. Fred was the bad guy.”

Judge Weinstein was clearly not deterred by the defendant’s claim of multiple personalities but was more moved by the “heart-wrenching stories” of the man’s many victims.

If you believe that you have been the victim of fraud, contact the Law Office of Christopher J. Gray at (866) 966-9598 for a no-cost, confidential consultation with an investment attorney.

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