Stockbroker Accused of Defrauding Merrill Lynch of $780K

(Feb 17) -- People talk their way into jobs all the time, but not many of them back it up with forged documents. Steven Mandala, a former stockbroker at Merrill Lynch, is accused of doing just that to land himself a job at the brokerage firm and a $780,000 loan.

Manhattan District Attorney Cyrus R. Vance Jr. said Mandala, 29, inflated his resume and falsified documents related to his job application to Merrill Lynch in April. He is being charged on multiple counts including grand larceny and money laundering.

Mandala previously worked as a stockbroker with the Maxim Group, where he reportedly made $100,000 a year. The indictment alleges that he convinced Merrill Lynch he was a partner at Maxim Group making $765,000 and managing $300 million in assets. He printed fake pay stubs, tax returns and W-2 forms to back up these claims, according to the indictment.

On the day he began work with Merrill Lynch, the company gave him the $780,000 loan as an incentive to join the firm. The loan was supposed to be paid back over eight years. Mandala deposited the money into his parents' bank account and one week later took out $245,580 to buy a Ferrari, the indictment alleges, claiming that he rarely went to work and only brought in two or three clients worth approximately $20,000.

At the end of June, Mandala resigned by e-mail and asked that his personal belongings be thrown out. Instead, Merrill Lynch went through his belongings and found credit cards in the name of his girlfriend's father, which had tens of thousands of dollars of charges on them. For this, he has been charged with identity theft on top of charges for grand larceny, money laundering, criminal possession of a forged instrument and falsifying documents.

Mandala pleaded not guilty in court Tuesday. His lawyer, Franklin A. Rothman, said the girlfriend had opened the credit cards in her father's name because she "had a bone to pick" with him. He also said that while his client may have padded his resume to get the job with Merrill Lynch, it was not to the extent that the indictment alleges, according to The New York Times.

Rothman said Mandala would turn over the Ferrari on top of $300,000 in assets already frozen to settle the case. The prosecution asked to have the Ferrari as part of Mandala's bail, but Justice Daniel P. Fitzgerald of the State Supreme Court of Manhattan told them it "doesn't matter as it relates to bail unless you believe he's going to drive off in the sunset with it," the Times reports.

Mandala is being held on $500,000 bail. He could get up to 15 years for each money laundering and grand larceny count, up to seven years for each identity theft and criminal possession count, and up to four years for each count of falsifying business records, according to Reuters.