Brokerage tied to a top figure in mob case

April 1, 2005

by Jim Freer

Management at newly closed securities brokerage LH Ross has included a Parkland resident whom the Broward Sheriff's Office calls a leader of a South Florida organized crime ring.
Salvatore Puccio, a former LH Ross branch manager and broker, was a participant in at least one fraudulent stock sale program at that company, according to a National Association of Securities Dealers complaint.

On Feb. 3, the BSO arrested Puccio and 22 others it said were linked with the Bonanno crime family and involved in crimes including loan sharking, stock market scams, offshore betting, dealing in stolen property and distribution of narcotics.

The BSO did not mention Boca Raton-based LH Ross when it announced those arrests, which are part of an investigation it calls Operation Coldwater.

The NASD did not mention Puccio this week when it an-nounced LH Ross's agreement to cease operations.

But documents The Business Journal obtained from state and federal agencies show that Puccio worked for LH Ross offices in Staten Island, N.Y., and in South Florida from 2000 until 2002. For part of that time, he was listed as the main official in LH Ross's Coral Springs office.

That connection adds a new element to the question of whether organized crime is playing a growing role in securities fraud in South Florida and other major markets.

Since 2000, federal prosecutors in New York have begun several cases in which they charged that organized crime figures controlled small brokerage firms.

The NASD, the securities industry's self-regulatory agency, closed LH Ross following an investigation that included its first-ever cease & desist order against any brokerage firm. Franklyn Michelin, the firm's founder and president, agreed to a permanent ban from the securities industry.

Securities industry re-cords indicate Puccio left LH Ross before 2003, when the NASD said Ross began a sale of its own unregistered stock. Those sales, in which the NASD alleges LH Ross defrauded investors of at least $11 million, prompted the regulator to issue its C&D order.