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WTC Broker Charged in $100-Million Fraud

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  • TRUEBLUE
    started a topic WTC Broker Charged in $100-Million Fraud

    WTC Broker Charged in $100-Million Fraud

    WTC Broker Charged in $100-Million Fraud




    November 19, 2001, 5:30 PM EST


    Two executives from a World Trade Center brokerage have been charged with plotting to steal $100 million from investors — a theft discovered in the wake of the Sept. 11 attacks.

    An indictment unsealed Monday accuses Andre Koudachev, 38, owner of First Equity Enterprises, of transferring the missing money to overseas bank accounts before becoming a fugitive. The government has so far seized $5.5 million in accounts in New York, New Jersey, Chicago and Switzerland.

    Also charged with conspiracy was former First Equity president Gary Farberov, 32, who pleaded innocent Monday in Brooklyn federal court and was released on $500,000 bond. His attorney, Charles Clayman, said the charges were based on “rumors and false information.”

    Barry Mawn, head of the FBI’s New York office, said a two-month investigation found that Koudachev’s investment firm “was basically a boiler room operation, soliciting investors worldwide, then stringing along those investors with blatant lies.”

    First Equity acted as a clearinghouse for another firm owned by Koudachev, Evergreen International Spot Trading, taking in funds for foreign currency exchange accounts, issuing statements to clients and disbursing money to those who wanted to cash out.

    Evergreen had lured 1,400 clients from 14 countries before First Equity’s 15th-floor offices at the World Trade Center were destroyed on Sept. 11, prosecutors said.

    When worried investors called after the attacks to ask about their accounts, Farberov and his brokers “lulled (them) to believe that their investments were secure in order to forestall discovery of the fraudulent scheme,” court papers said.

    The criminal indictment follows a lawsuit filed earlier this month by Dirk Karreman, of Queensland, Australia, who accused First Equity executives of “spending or absconding (with the money) to a presently unknown location.” Karreman claims he lost about $2 million.

    The suit claimed that 11 days after the trade center attack, during a golf outing in Brooklyn, an Evergreen trader was informed that Koudachev had disappeared with the investors’ money and “they were never going to see him again.”

    The trader’s bosses, including Farberov, allegedly tried to enlist him in a cover-up; he instead reported the case to authorities.

    A call to Koudachev’s attorney, Nathaniel Marmur, was not immediately returned. But Marmur has said that his client — a Russian citizen now living in Moscow — denied any wrongdoing, and was “disappointed and concerned with the apparent loss of investor funds.”

    If convicted, Koudachev and Farberov face up to five years in prison and fines of $500,000 or higher.

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