Oct. 7--A federal judge has scolded a convicted stock swindler who complained that authorities should not be allowed to take $150 a month from his prison commissary account to repay thousands of retirees who lost $20 million in penny stock frauds he helped pull off.
"If a criminal defendant defrauds victims of their money and is sentenced to prison, is it unlawful or unfair to require him to pay restitution from funds that his family members donate to his prison commissary account?" U.S. District Judge Jeffrey A. Meyer asked. "I don't think so."
Brian Ferraioli, the disbarred stock broker from Long Island who complained, was one of about a half-dozen grifters who played roles in the far-reaching stock manipulation scheme that sent former Hartford City Councilman Corey Brinson to prison for three years in 2017. Brinson has since been released and is campaigning to recapture his council seat.
Brinson played a bit part in a pump-and-dump stock manipulation conspiracy that prosecutors said ensnared more than 12,000 victims. Based on rigged stock price manipulations, the conspirators made off with millions while their usually unsophisticated investors lost.
Meyer sentenced Ferraioli to 72 months and ordered him to pay $6.8 million to a victims' fund -- a sum no one expects he ever will repay. But in the meantime, Meyer has ruled that the U.S. Bureau of Prisons can continue to extract $150 a month from the $250 a month Ferraioli's wife and mother deposit in his prison commissary account -- an account inmates are allowed to use to buy items such as toiletries and snacks from the prison commissary.
Ferraioli, confined at a low-security federal prison camp in Maryland, makes less than $10 a month at his prison job and thinks the government should have to rely on that money for victims. His lawyer wrote in a court filing that "there is a certain dissonance" in transferring commissary money to impoverished victims.
But Meyer said in his written opinion that "it is not unfair to require Ferraioli to pay reasonable restitution from his assets or income, whatever the source of those resources."
One of the organizers of the $20 million swindle, a discredited broker from Suffield named Christian Meissenn, was released from prison in June. He served three months after arguing he deserved consideration because he suffers from a rare and often fatal blood disease. He was ordered to make $6.8 million in restitution, too.
His repayment record, like that of Ferraioli, is not public.
Edmund H. Mahony can be reached at [email protected].
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