Wall Street Rogues

Fast cars, women, and cash. These financial whizzes had it all. But some of them crossed the line to get rich and ended up serving hard time, creating scandals that continue to affect the black investment community.

August 2003 on multiple counts of wire, mail, and bank fraud in an alleged scheme where authorities claim he conned investors out of approximately $1.67 million through his firm, Peregrine Capital Management L.P.

Court documents state that the 37-year-old made false claims to potentia
l clients, saying he managed more than $100 million for institutional investors to gain their trust — and their money. But instead of investing these funds, he allegedly used it to purchase high-end cars (including a Ferrari and a Mercedes-Benz), jewelry, and other luxury items.

According to authorities, in 2000 Sawyer conned one investor out of $50,000 under the guise of an investment in a venture called Last Mile Holdings Inc., a technology investment company in which Sawyer billed himself as a principal. Authorities also state that he falsely claimed that Peregrine Capital Management was a private equity firm that oversaw $500 million in investments. Sawyer is also charged with falsely presenting himself to another investor as a securities broker specializing in U.S. Treasury bonds who managed more than $100 million in funds. Rather than purchase the securities, Sawyer is charged with using the money for his personal use.

Grace, an African American engineer who resides in Houston, claims to be one of the investors swindled by Sawyer. According to Grace, who is included in the complaint against Sawyer filed by the U.S. attorney’s office in Chicago, Sawyer contacted him and persuaded him to invest $100,000 in a bond offering that would yield an annual 10% rate of return. Grace is charging Sawyer with using part of the funds for personal use and $30,000 of it to pay a prior investor in the alleged scheme.”We were looking for something low risk, which we thought the Treasury bonds would be, but with a decent return, and that’s what Sawyer was assuring,” Grace says.

While Sawyer and his team prepare for their legal battle, Grace is not optimistic about getting his money returned. “This is what the FBI told me: ‘Don’t count on it,’” recalls Grace. “And that’s been a hard thing to swallow.”

On Feb. 5, 2004, U.S. District Judge Ronald A. Guzman rescheduled Sawyer’s trial for Oct. 18, 2004, after Sawyer replaced his attorney. “Mr. Sawyer maintains his innocence,” says his current attorney, Chicago-based Shelly B. Kulwin of Kulwin & Associates L.L.P. “We anticipate going to trial in the fall and feel he’ll be exonerated.”

Joseph Jett: Can He Clear His Name?
It’s February 2004 and Orlando Joseph Jett is in a setting all too familiar: testifying before the SEC. Once again, he’s explaining his version of a 10-year-old scandal that brought down brokerage giant Kidder, Peabody & Co. and rocked Wall Street.

Jett, who represented himself at the hearing, argues vehemently to overturn a 1998 ruling by an SEC administrative law judge that he violated record-keeping laws by executing phantom trades and recording nonexistent profits on Kidder’s books in 1994. At that time, Jett was required to pay restitution for $8.2 million in gains to the SEC and a $200,000 fine, although the judge

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