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Scam Suspect Reportedly Cites Lax Supervision

January 29, 2002|From Associated Press

A Cleveland stockbroker suspected of stealing as much as $100 million from clients reportedly told authorities before he disappeared that lax supervision made it possible for him to misappropriate money over a 15-year period.

Frank Gruttadauria, 45, disappeared Jan. 11. The FBI said Monday that the agency had not found him.

"I can hardly believe that I could have done this without detection for so long," Gruttadauria said in a letter to authorities, according to the Plain Dealer, which said it obtained a copy of the letter.

"The various firms' greed and lack of attention at the senior level contributed greatly to that," he wrote. "Be that as it may, I am unwilling to continue and I'm ashamed and sorry for what I have done."

Gruttadauria had worked in Cleveland at Lehman Bros. Holdings Inc. since October 2000.

The government is investigating reports that about 25 of Gruttadauria's clients may have lost at least $100 million and had their account values falsely inflated by as much as $250 million.

The FBI and Justice Department issued an arrest warrant for Gruttadauria on Friday, charging him with making false statements to a financial institution. Wall Street regulators also are investigating.

Gruttadauria said in the letter that he acted alone and didn't take the money for personal use.

FBI spokeswoman Laurie Fournier said Monday that she could not confirm the authenticity of the letter or comment on its contents.

Lehman Bros. pledged its cooperation in the investigation, but said it couldn't comment on whether investors who lost money might be able to recover it.

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