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Ex-Mouseketeer Sentenced to Prison

Fraud: Federal judge gives Darlene Gillespie two years for her conviction in stock market scheme. She professes innocence, promises to appeal.

March 12, 1999|DAVID ROSENZWEIG | TIMES STAFF WRITER

Darlene Gillespie, an original member of television's "Mickey Mouse Club," was sentenced to two years in prison Thursday for buying large amounts of stock with worthless checks and obstructing a Securities and Exchange Commission investigation.

In handing down the sentence, U.S. District Judge Lourdes G. Baird chastised the former Disney Mouseketeer for lying during her trial last year. The judge cited her perjury on the witness stand as grounds for a longer prison term.

Outside the courtroom, however, Gillespie professed innocence and promised to appeal the conviction.

"I believe with all my heart that at the end of the day I will be vindicated," she told reporters.

Baird gave her until July 26 to get her affairs in order and surrender to the Bureau of Prisons.

A Los Angeles federal court jury returned guilty verdicts against the 57-year-old Gillespie in December on a dozen counts of securities fraud, mail fraud, obstruction of justice, perjury and conspiracy.

Gillespie's longtime companion and now husband, Jerry Fraschilla, 61, is serving 18 months at Lompoc federal prison after pleading guilty in the case last year.

They were married Jan. 2 in Ventura County during a brief furlough granted by prison authorities, according to Gillespie.

"I'll be reporting [to prison] about the same time he's getting out," she said.

Gillespie and Fraschilla were accused of bilking several brokerages by "free riding," the placement of buy orders for stock without the means or intent to pay for the shares.

Assistant U.S. Atty. Jack S. Weiss, who tried the case, said Gillespie and Fraschilla used bad checks to buy thousands of shares in a Colorado-based company, Unique Mobility, figuring to make a windfall if the stock price climbed but risking nothing if it tumbled. The prosecution charged that they also bought stock by opening accounts in the name of a fictitious investor named Michael Andrews.

All told, the couple placed orders on margin for more than 194,000 shares of stock valued at $827,000 in 1992 and 1993. The SEC filed a civil suit against Fraschilla and Gillespie in 1994 for free riding. It was settled a year later when they agreed to pay nearly $165,000 in fines and reimbursements.

But the SEC also referred the case for criminal investigation. FBI agents found evidence that the couple provided forged documents and lied in depositions taken during the SEC's civil action.

This is not Gillespie's first conviction. She and Fraschilla were found guilty in 1997 of shoplifting at a department store in Ventura.

She also is suing Walt Disney Co. and the Screen Actors Guild, contending she was not paid for rebroadcasts of "Mickey Mouse Club."

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