United States: Fraudster cashes in his chips

Global Finance, Sep 2001 by Keeler, Dan

NEWSMAKERS

After more than five years of legal maneuvering, the bankrupt former penny stock tycoon and racecourse owner Robert E. Brennan has finally been hobbled.At a federal bankruptcy court in Trenton, New Jersey, Brennan was sentenced last month to almost 10 years in jail for money laundering and bankruptcy fraud,

Brennan, who gained notoriety in the heady days of the mid-1980s for orchestrating a series of pump-and-- dump penny share schemes, was convicted in April of seven counts of bankruptcy fraud. His conviction put an abrupt stop to his allegedly lavish lifestyle when the judge revoked his bail, claiming Brennan was likely to run unless he was kept under lock and key His friends thought otherwise, stumping up a $6 million bond between them in an attempt to keep the flamboyant fraudster at large.

Brennan's best-known transgression was fleecing investors by persuading them to buy overpriced shares in no-name companies in which his firm, First Jersey Securities, had been quietly building holdings. But it was not this that led to his downfall. Brennan's crucial mistake was to cash in $500,000 of casino chips for his own use while claiming he could not pay any of his creditors.

Clearly, his legendary charm did not desert him, even in the harsh glare of the courtroom. Moments before the judge announced his sentence Brennan made a tearful apology to pretty much anyone he could think of.The judge, having previously said the man in the dock deserved no leniency, promptly lopped 11 months off the possible maximum sentence. It might not sound much on a nine-year-plus jail term, but it could make the difference between Brennan's spending Thanksgiving 2010 surrounded by inmates or surrounded by intimates.

It's a little early for our fraudulent friend to be giving thanks, though, since he still has a couple of contempt orders and around $200 million in debts and judgments to deal with.

-Dan Keeler