Alan Abrahams, also known as James A. Carr, alleged commodities swindler, was sentenced to six months less one day, in jail by a federal Judge in Detroit yesterday.
Abrahams and two of his associates were sentenced after pleading guilty last month to violating an earlier order by Judge Noel Fox which prohibited employe's of Abraham's firm, Lloyd, Carr & Co. from engaging in fraudulant practices in the sale of London commodity options to the public, and for refusing to show the firm's books to the Commodity Futures Trading Commission.
The sentence is the first criminal sanction to be imposed in connection with CFTC enforcement activities. The agency was established in 1975.
Also sentenced were James Brien of Sudbury, Mass., and Ralph Zolla of Boxford, Mass. Each were sentenced to two months in jail.
Abrahams, a celebrated con-man with a history of jumping bail and escaping from prison, resides in Marblehead, Mass., where the court has authorized monthly payments in excess of $750 to keep his two daughters living in a $300,000 mansion.
Judge Fox dropped a bombshell in court during the sentencing, informing the parties that he may put all money alleged to be obtained fraudulently by Lloyd, Carr - in the millions of dollars - into a special trust fund for the thousands of victims of Carr's option scheme.
"People must not be permitted to harvest fruits from frauds," the judge said, indicating that he would not allow Abraham's attorneys to be paid out of the company funds, which are presently in the hands of a court-appointed receiver in Boston.
Abraham's attorneys, F. Lee Bailey and Anthony Cardinale, and several other attorneys associated with Abrahams at various times during the past year, have been paid considerable fees out of company funds. It is unclear whether or not the judge will attempt to order some or all of those fees returned.
Abrahams is presently serving a two and a half year sentence for filing false and fraudulent income tax returns and faces a trial in Boston on a 50 count indictment charging he and his associates with mail fraud and several violations of the Commodities Exchange Act.
Lloyd, Carr sold London options from offices in 10 states, succeeding for more than a year in keeping federal authorities from closing down the boiler-room operations.
At the sentencing, Judge Fox said of Lloyd, Carr:
"There is an abundance of evidence in this proceeding that this was a large operation. It was a massive operation. It was an attack on the financial wealth of people who could not afford it. The magnitude and characteristics (of Lloyd, Carr & Co.) are patently obvious. Evidence presented to this point is compelling that Lloyd Carr & Co. engager in a horrendously large, fraudulent activity."
In a sentence directed at former customers of Lloyd, Carr who may have been cheated, the CFTC said anyone who may have had dealings with the company and think they may have suffered damages should write about possible reimbursement to the receiver: Judge Walter McLaughlin, 10 Post Office Square, Boston, Mass. 02109.