Fifty stockbrokers, some of whom paid as much as $5,000 to impostors to take licensing exams for them, were indicted in the biggest securities-test cheating scheme ever uncovered, New York prosecutors said Wednesday.
Manhattan Dist. Atty. Robert Morgenthau said there were 54 defendants in the scheme, including two "ringers" who took the tests, middlemen who helped carry out the scheme and 50 brokers who paid the impostors. Three of the latter became middlemen themselves.
Another defendant previously pleaded guilty for his role in the scheme, and Morgenthau said the investigation is continuing and that more arrests were expected. The defendants arrested so far mostly worked for small brokerage firms throughout the country.
Authorities say the scheme centered on a national six-hour exam that is offered daily at 56 sites nationwide. About 200,000 tests are given annually.
The alleged ringers arrested in the scheme are Igor Sheckhtman of Encino, who was employed as a broker with now-defunct M. Rimson & Co. and who allegedly took at least 28 tests for 17 people, and Robert Idzi, of Pleasantville, N.Y., who allegedly took at least 22 tests for 17 people.
Rimson, which had offices in New York, was expelled from the National Assn. of Securities Dealers in March. Idzi had previously worked for Sunpoint Securities Inc., based in Longview, Tex.
Charges against the defendants include forgery in the second degree and criminal possession of forged instruments, both carrying terms of up to seven years, and falsifying business records and offering false instruments for filing, which carry possible prison terms of up to four years.
Authorities said the ringers were able to escape detection by taking the tests at a variety of locations in different states and by using fake photo identifications.
Mary Schapiro, president of the National Assn. of Securities Dealers Regulation, the enforcement arm of the NASD, said it has not yet been determined whether any customers lost money because of the alleged scheme.
She said that the NASDR began fingerprinting test takers last year and this year will begin videotaping them as well.