Securities Fraud Could Impact Schools; Asked to Return Stocks
Tabor Academy received $1.52 million in stock from John Mazzuto, and they
even named their Mazzuto Math Wing after him. Tabor's headmaster praised
Mazzuto, and said, "Appreciate is probably not a strong enough term
because it is probably impossible for me to measure all that has gone
into the creation of this gift." Yale University, too, received a
generous gift of $1.7 million in stock from Mazzuto. A few others schools
also received gifts of stock.
Unfortunately, Mazzuto recently pleaded guilty in a $110 million securities fraud case and will be sentenced next month. His New York-based Industrial Enterprises of America (IEAM) has already filed for bankruptcy and settled.
Mazzuto, along with partner James Margulies, allegedly dealt in illegally issued employee stock options. According to court documents, Mazzuto and Marguiles were using a "pump and dump" scheme with IEAM's stock via accounting fraud and were also "printing money". This allowed them to keep the company's stock high, while they took freely from the company to fund personal expenses and lavish gifts.
Yale University has already returned $1 million in stock, but Tabor Academy is still fighting to keep the Mazzuto stock. None of the schools affected were in any way aware of Mazzuto's alleged securities fraud.
The securities fraud attorneys with David P. Meyer & Associates represent victims of securities fraud nationwide in stockbroker mediation, arbitration, and litigation claims.