Dominick P. Carollo, Wire Fraud and Defrauding the United States, New York 2012

Three Former Financial Executives Convicted in Municipal Bond Scheme

NEW YORK CITY – A federal jury in New York City has convicted three former financial services executives for their participation in conspiracies related to bidding for contracts for the investment of municipal bond proceeds and other municipal finance contracts.

Dominick P. Carollo, Steven E. Goldberg, and Peter S. Grimm, all former executives of General Electric Co. (GE) affiliates, were found guilty on all remaining counts of a superseding indictment in the U.S. District Court for the Southern District of New York.

The trial began on April 16, 2012. Carollo, Goldberg, and Grimm were initially indicted on July 27, 2010.

The defendants corrupted the competitive bidding process and defrauded municipalities across the country for years, costing municipalities around the country millions of dollars.

“The defendants corrupted the competitive bidding process and defrauded municipalities across the country for years,” said Deputy Assistant Attorney General Scott D. Hammond of the Antitrust Division.

According to evidence presented at trial, while employed at GE affiliates, Carollo, Goldberg, and Grimm participated in separate fraud conspiracies with various financial institutions and insurance companies and their representatives at various time periods from as early as 1999 until 2006.

Each of the fraud conspiracies involved the defendants working with financial institutions and insurance companies to corrupt the bidding process for investment agreements, depriving municipalities of competitive interest rates for the investment of tax-exempt bond proceeds.

“Fundamentally, this case is about fraud in the investment of public money,” said Janice K. Fedarcyk, Assistant Director in Charge of the FBI in New York.

A total of 18 individuals have been charged as a result of the department’s ongoing municipal bonds investigation. Including today’s convictions, a total of 15 individuals have been convicted and three await trial. Additionally, one company has pleaded guilty.

The convictions reflect the government’s determination to preserve fairness and competition in the financial services market.

Dominick P. Carollo was found guilty on two counts of conspiracy to commit wire fraud and defraud the United States. Steven E. Goldberg was found guilty on four counts of conspiracy to commit wire fraud and defraud the United States. Peter S. Grimm was found guilty on three counts of conspiracy to commit wire fraud and to defraud the United States.

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