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Exec guilty in stock scam

The ex-St. Petersburg resident is convicted in a scheme of bilking investors out of $15-million.

By MARK ALBRIGHT
Published April 11, 2007


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A federal jury in Camden, N.J., on Tuesday found a onetime St. Petersburg executive guilty of securities fraud and money laundering in connection with a penny stock scam that cost investors more than $15-million.

Robert P. Gordon, 56, former chairman of St. Petersburg-based TeleServices Internet Group Inc. and a founder and chief executive of its onetime parent, Phoenix Information Systems Inc., was one of nine people convicted of conspiracy in a stock manipulation scheme in the defunct companies' shares that lasted from December 1996 through November 2001. Gordon faces a July 13 sentencing of up to 25 years in prison, fines and paying back twice the proceeds of the ill-gotten gains.

The government alleged penny stock brokers in New Jersey and Vancouver, British Columbia, a Denver attorney and entities in the Cayman Islands all helped Gordon artificially inflate and deflate the value of TeleServices shares. They also helped him secretly gain control of about 100-million worthless or nearly worthless shares that were then sold for millions to unsuspecting investors.

In some cases, brokers purchased shares from their clients accounts without authorization. During the four-week trial, prosecutors outlined how the group hid much of its handiwork through bogus consulting agreements that were used to bypass SEC registration requirements. Joseph F. Morgan, a St. Pete Beach man who once worked as independent auditor and later as a promoter of the failed companies, pleaded guilty in October to stock-manipulation charges and implicated several others who were convicted Tuesday.

FBI investigators suspect many of the victims live in New Jersey and suggest they call the agency's Atlantic City office at (609) 677-6400.

Phoenix, which was sold out of bankruptcy in 1998, was touted as holding a contract to run a reservations system for China Southern Airlines. TeleServices, which was spun off from Phoenix, ran a call center that answered toll-free information requests for some Florida tourist destinations including the St. Petersburg/Clearwater Area Convention and Visitors Bureau.

Mark Albright can be reached at albright@sptimes.com or (727) 893-8252.

[Last modified April 10, 2007, 23:10:15]


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