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Executive gets 20 years for fraud in stock scam

His company was based in St. Petersburg.

By MARK ALBRIGHT, Times Staff Writer
Published September 27, 2007

The top executive of a defunct St. Petersburg company has been sentenced to 20 years in prison on securities fraud and money laundering charges for a penny stock swindle he helped orchestrate in TeleServices Internet Group Inc.

Robert P. Gordon, 57, who claims he doesn't have the cash, next faces a hearing before U.S. District Judge Jerome Simandle when prosecutors will ask that he forfeit any rights to $15.1-million he allegedly bilked from investors in the stock-manipulation scheme.

"It would be a lien that follows him the rest of his life to help repay the victims," said Stephan Stigall, an assistant U.S. attorney who prosecuted the case in Camden, N.J.

Gordon, who also was ordered to provide truthful financial records to the IRS for back taxes, is banned from the fields of securities, financial investments or the personal finances of others for three years after his release.

Eight others convicted in the case, including Joseph F. Morgan, a onetime St. Pete Beach independent auditor who later helped promote TeleServices stock to investors, await sentencing in November.

Gordon was chairman and founder of Phoenix Information Technologies Inc., a St. Petersburg startup that was promoted as having a deal to handle reservations for a Chinese airline. When the company was steered into bankruptcy, one of the big investors who lost money in the venture was billionaire currency trader George Soros.

Gordon, however, resurrected the leftovers into TeleServices, then used brokers and lawyers in New Jersey, Denver and Vancouver, British Columbia, to spin a complicated series of transactions, consulting deals and offshore wire transfers to artificially inflate and deflate the value of 100-million shares of TeleServices' nearly worthless stock.

The scheme began to unravel after complaints were filed against New Jersey stockbroker Rhett Kirchhoff, whom Gordon paid to tout the stock to investors.

Federal authorities don't know how much money poured through the scheme or where it is now. Some of the cash was traced to banks in the Cayman Islands and a Taiwanese national who lives in the People's Republic of China.

So far they have added up $12-million that investors reported losing. Many investors who bought their shares years ago are dead. Authorities ask anybody who invested between December 1996 and November 2001 to call the Atlantic City office of the FBI at 609 677-6400.

News researcher Carolyn Edds contributed to this report. Mark Albright can be reached at albright@sptimes.com or (727) 893-8252.

[Last modified September 26, 2007, 23:37:26]