Bloomberg reports that Ghavami, Gary Heinz and Michael Welty are charged in a six-count indictment with 'long-running conspiracies and schemes to defraud' municipal-bond issuers and U.S. tax authorities by fixing prices on agreements for investing the proceeds of municipal-bond sales.
The trial, in front of U.S. District Judge Kimba Wood in Manhattan, is the result of a nationwide probe of bid-rigging involving banks and brokers including CDR Financial Products Inc.
Prosecutors expect to prove 'the knowing and active participation' of UBS, JPMorgan Chase & Co. (JPM), Bank of America Corp. and General Electric Co. (GE) in the fraud alleged against the three former UBS executives, according to a July 6 court filing.
Bank of America, JPMorgan Chase, UBS, Wells Fargo & Co. (WFC) and GE Funding Capital Market Services, a former unit, have paid more than $700 million to settle claims by the government. Beverly Hills, California-based CDR and 13 individuals have pleaded guilty to criminal charges.
In May, three former GE bankers, Dominick Carollo, Steven Goldberg and Peter Grimm, were found guilty by a federal jury in Manhattan of conspiracy to commit fraud by manipulating auctions for municipal-bond investment contracts. The government claimed that from August 1999 to November 2006 the men gave kickbacks to brokers hired by local governments to solicit bids, seeking to win auctions and increase their profit.
Carollo, Goldberg and Grimm have asked the trial judge to throw out the verdict.
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