Ex-securities dealer gets 21 years for stock sales

A former securities dealer was sentenced Tuesday to more than 21 years in federal prison for orchestrating the $3.5 million sale of worthless stock over the Internet.

Frank J. Custable Jr., 44, showed no emotion as federal Judge Blanche M. Manning imposed the unusually stiff sentence, saying "you were the mastermind behind the scenes" of a scheme that went on for more than a year.

"This was not a one-time crime," Manning said. She said the scheme was "well thought out over a number of years."

Custable was fined $20,000.

The sentence followed an earlier hearing at which Assistant U.S. Attorney John Podliska told the judge that Custable had shown a "callous disregard" for those who naively bought stock through the scheme and business executives who were desperate to get financing for their companies and tried to obtain it through Custable.

The government maintained that Custable and others working under him found business executives whose companies were desperate for financing and got them to issue unregistered stock. Prosecutors said the companies lied to federal regulators in issuing the stock.

Custable and his associates then purchased the stock and marketed it at a profit through e-mail to buyers of penny stocks.

These are called "pump and dump" operations because scammers trumpet troubled companies as the next big thing, inflating the value of their stocks, then dump the shares on unsuspecting investors before the companies go under.

Custable pleaded guilty to charges of obstruction of justice, securities fraud, mail fraud and criminal contempt of court -- for refusing a judge's order to give authorities information about his offshore bank accounts.

Seven others also have been convicted in the case.