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Man Found Guilty of Bilking Investors in Stock Scam

November 02, 2001|DAVID ROSENZWEIG | TIMES STAFF WRITER

The top salesman in a Canoga Park telemarketing business was convicted in Los Angeles federal court Wednesday of participating in a scam that bilked stock investors out of millions of dollars.

Aldo Tarallo, 67, of Lake Arrowhead and Rancho Mirage, was found guilty on six counts of securities fraud and four counts of mail fraud. Prosecutors had charged that Tarallo and others involved in the "boiler room" operation conned victims into believing that the companies in which they were investing were about to go public.

Assistant U.S. Attys. Steve Olson and Randall Lee said hundreds of investors across the nation lost a total of $6.2 million in the scam.

David Allan Colvin, 57, of Chatsworth, president of the telemarketing firm, Intellinet Holdings, and John Larson, 51, of Beverly Hills, sales manager, pleaded guilty in the case in September.

According to evidence presented during the two-week trial, the telemarketers touted investments in an assortment of companies, including one that supposedly could detoxify a person of drugs and alcohol within 15 minutes and another that was developing a guide to adult sites on the Internet.

Prosecutors also charged that the defendants falsely claimed that NBC news anchor Tom Brokaw and former Surgeon General C. Everett Koop were affiliated with a chain of weight loss clinics they were promoting.

Colvin also fabricated a firm called Wall Street Research Co., which generated bogus stock analyst reports recommending the companies that he and his staff were promoting. Tarallo raised more than $600,000, including $120,000 from one victim who said it was her life savings.

Colvin and Larson have been behind bars since 1999, when they were arrested for failing to hand over more than $1 million in ill-gotten gains in compliance with a civil judgment obtained by the Securities and Exchange Commission.

They are scheduled to be sentenced Dec. 3 for the telemarketing fraud. Tarallo's sentencing is set for Jan. 28.

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