European Stars And Stripes (Newspaper) - January 19, 1989, Darmstadt, Hesse                                Page 4 the stars and stripes thursday january 19,1989 18 charged As racketeers linked to $40 million fraud Chicago a Federal racketeering charges were filed against 18 former employees of a now defunct commodities brokerage firm accused of defraud ing 2,600 investors out of about $40 million. The charges announced tuesday grew out of the largest investigation of its kind Ever undertaken by the Federal government according to . Attorney Anton Valukas. The 18 former Chicago area employees of first commodity corp. Of Boston All named in an indict ment returned by a Federal grand jury and in a Crimi Nal information were charged with 187 counts of racketeering racketeering conspiracy and wire and mail fraud Valukas said. The company s former National vice president for sales two Branch managers and 15 former salesmen from its Chicago and suburban Oak Brook offices were accused of using High pressure tactics to persuade customers around the country to invest in High stakes commodity ventures misrepresented As Low risk. Valukas said customers were solicited by first commodity sales representatives posing As commodities experts. The representatives often made repeated phone Calls using scripts handed out by managers he said. Investors were falsely told that commodity trading was not risky. And would Lead to High profits the prosecutor said. In fact. The defendants knew Al most All of fcb s customers lost  during the time covered by the charges from 1980 to february 1987, the Chicago and Oak Brook offices had $100 million in sales of which $63 million was lost Valukas said. More than $40.6 million of those sales and More than $22.7 million of the losses were attributable to the former employees named in the complaints Valukas said. He declined to say whether More charges were Forth coming but noted that the investigation is continuing in Chicago Boston new York Miami and san fran Cisco. Assistant . Attorney Michele Smith said the probe was the largest of its Type in several aspects including the number of victims 2,600 named in tuesday s charges As Well As 44,400 other customers of the firm during the period of the alleged scheme. Allegations Are that the entire company was oper ated under fraud she said wednesday. The $600 million raised by first commodity from1980 to the firm s collapse in february 1987 is alleged to have been fraudulently generated and is the largest sum involved in an alleged commodities fraud scheme she said. More than 500 Fri agents the most Ever in such a Case have been involved in the probe Smith  november three former salesmen for the company pleaded guilty in the investigation and agreed to Coop Erate with Federal agents. First commodity was founded in the late 1970s, and rapidly grew into one of the nation s leading futures trading companies. But it collapsed in 1987 under Mountain of investor lawsuits and Federal investigations. The newest defendants include David c. Connolly,48, of Teaneck n.j., first commodity s former National sales vice president former Oak Brook Branch manager Ross a. Barnard 37, of suburban Hinsdale and Barnard s brother Stephen l. Barnard 38, of sub Urban Flossmoor former House broker at the Chicago office. Neither Connolly nor the Barnards could be reached for comment. The Barnards had unpublished numbers and Connolly was not listed in the Teaneck area. If convicted the defendants could face lengthy Pris on terms and thousands of dollars in fines. It is a sad reality that sophisticated and deceptive sales techniques can yield great profits to those Willingto use them Valukas said. These cases should serve As a Clear warning that fraud and deception in the offer and Sale of commodity contracts in whatever format takes will be thoroughly investigated and vigorously  satisfied soviet shopper Maria sen Otova of the soviet Union has officially become a California  her new to shirt says so. The 7-year-old got the to shirt during a free shopping spree in Walnut Creek calif., As she awaits desperately needed heart surgery. While in the department store Maria also found a pair of Blue jeans and a Denim jacket to her liking. Far ranging decision upholds new sentencing rules Washington a a new sentencing system that took effect last nov. 1 for people convicted of Federal crimes i constitutional the supreme court ruled wednesday in a decision that will affect thousands. The justices 8-1 decisi9n upheld . Sentencing commission s rules As Well As the Validity of the commission itself. Scores of Federal trial judges have re fused to use the new sentencing rules Call ing them and the commission unconstitutional. Now defendants sentenced by those judges must be re sentenced. The decision carries no Impact however for any defendant sentenced in a stat court. The new sentencing system has been applied to about 10,000 Federal court defendants. The commission was created by con Gress in the sentencing Reform act of 1984,legislation aimed at eliminating what some called unjustified disparities in sentences. The Law empowers the commission wit seven members appointed to six year terms by the president to Tell Federal judges what sentences should be imposed for various crimes. Three of the commission s Mem Bers must be Federal judges. The guidelines generally stiffened the prison time Federal c9nvicts Are required to serve. The commission eliminated parole and curtailed credit for Good behaviour. Judges who had struck Down the new sentencing system had ruled that Congress unlawfully avoided political accountability by unconstitutionally delegating its legislative Power tothe commission. That the commission because it includes members of the judiciary and holds legislative Power violates the Constitution s principle of the separation of Powers. That the new rules violate defendants due process rights by curbing too severely judges discretion in sentencing. In justifying judges membership on the commission Justice Harry Blackmun said Congress is free to Call on the judicial ranch s help in a matter uniquely with in the Ken of  Only Justice Antonin Scalia dissented on grounds that the commission was Given Power not authorized by the Constitution. Sentencing commission chairman William w. Wilkins jr., a judge on the 4th . Circuit court of appeals in Rich mond va., called wednesday s ruling one of the most important decisions handed Down by the court this  Wilkins said the commission s guide lines Are now the Law of the land and the barriers to full implementation have been  the test Case before the Justice stemmed from the prosecution of John m. Mistretta who pleaded guilty to conspiring to possess and distribute cocaine after his 1987 arrest in Kansas City. Before Mistretta s sentence was imposed he challenged the new sentencing rules. A trial judge dismissed the Chal Lenge and sentenced Mistretta to 18 months in prison to be followed by a three year term of supervised release. Wednesday s decision upheld that sen tence. Panasonic to repay buyers in Deal with investigators new York a Panasonic co.,accused of bilking Consumers out of Mil Lions of dollars in a Price fixing scheme has agreed to return up to $16 million to buyers nationwide state attorney Gen eral Robert Abrams said wednesday. Abrams accused the company of coercing retailers into charging full list prices forts products by threatening to Stop supplies to stores that sold Panasonic equipment below the suggested retail Price. The company denied any wrongdoing but agreed to make refunds to avoid disruption to its dealers and to the conduct of its business according to papers filed wit the . District court in Manhattan. Abrams said the alleged scheme involved a number of popular products sold under the Panasonic and Technics labels including videocassette recorders videotape cameras telephones and an swering machines. The company allegedly began the scheme in March 1988 and ended it about six months later when it Learned that Abrams office had begun an investigation the attorney general said. Under the agreement Panasonic will notify Consumers who bought its products during that period that they Are eligible f9rrefunds. Abrams said refunds will be Avail Able to about 665,000 people nationwide. Panasonic also agreed to notify All fits retailers of their right to set their own prices and to spend $2 million administering the settlement Abrams said. 10-year-old cocaine suspect cries when he s ordered held Hauppauge . A a 10 year old boy accused of Selling cocaine was led away in tears and Handcuffs to children s shelter where he was ordered held because he failed to appear in court on two previous arrest warrants. During a 30-minute hearing tuesday Suffolk family court judge Donald Auperin ordered the boy detained despite his Mother s assurances that she would make sure he showed up at the next hear ing scheduled for Friday. The Mother also had been subpoenaed at the boy s two previous court dates. The child believed to be the youngest suspect Ever arrested on Long Island on drug Selling charges remained silent and showed no emotion until he apparently realized he would not be released. He then began to cry. His Mother left the courtroom sobbing after watching her son wearing sneakers and Blue jeans with a rolled up comic Book in his Back pocket being led away. He was taken to the Nassau county Chil Dren s shelter in Westbury. The boy s attorney entered an inno cent plea on the youngster s behalf. A 14-year-old accomplice arrested with the 10-year-old, was released in his Mother s custody after his attorney argued that the boy posed no Dan Ger to society