After he was busted for stealing more than $5 million from his
clients, New York accountant Stephen P. Corso informed on so many
mobsters that a Las Vegas columnist wrote he "did everything but
dig up Jimmy Hoffa."
In his most celebrated case, Mr. Corso wore a wire for more than
a year in Las Vegas strip clubs and casinos, generating crucial
evidence needed to convict two New York police officers for acting
as Mafia hit men.
When Mr. Corso in 2009 pleaded before a federal judge for a
reduced sentence for his own crimes, he pledged that he had turned
his life around.
While he rejected a request to enter the witness-relocation
program, he told the federal judge he would "never, ever" be a
licensed accountant again. His license was revoked following his
conviction.
Six years later, Mr. Corso still owes restitution, and he is
preparing financial statements on behalf of a number of penny-stock
companies, according to public records and people familiar with the
matter.
The Securities and Exchange Commission is investigating Mr.
Corso's activities as part of a wider probe into penny-stock fraud
that will likely lead to enforcement action, said a person familiar
with the matter.
Mr. Corso, a felon, is now working under a slightly different
name, according to public records and people familiar with the
matter.
He is touting false academic and professional qualifications,
including claims to be a licensed certified public accountant and
attorney, as well as an Ivy League degree he doesn't have,
according to those same sources. Mr. Corso is also professing to be
younger than 60 years old, which the Bureau of Prisons says is his
true age.
The Wall Street Journal isn't publishing Mr. Corso's new name or
his current location. At his sentencing in 2009, his lawyer said
Mr. Corso "will live the rest of his life…with a target on his
back."
One of the Mafia cops bragged to him "about dunking someone's
head in acid repeatedly," according to court records, while another
person told Mr. Corso that if he was an informant "he would get
this…[and the person] put his fingers to his head like a gun
casing."
When reached by the Journal, Mr. Corso said he has "no
comment.…I'm not going to have any comment on any of this."
It isn't clear how aggressively the U.S. government is pursuing
Mr. Corso for the money he still owes. A spokesman for the
Connecticut U.S. attorney, who led the prosecution against Mr.
Corso, said, "the government is pursuing all its remedies allowed
by law."
In a flurry of legal action last year, prosecutors served what
is known as a writ of garnishment on him and persuaded a federal
judge to schedule a hearing to look at his financial status and his
means for paying the full restitution.
The hearing, scheduled for December, has been postponed, with no
new date set, according to court records.
It isn't uncommon for prosecutors to have difficulty collecting
debts and restitution owed as the result of an enforcement action.
In most of the past 10 years, the Justice Department has collected
between 20 and 30 cents on the dollar for the money it is owed, the
department's figures show.
Mr. Corso's former wife is also pursuing him, for more than
$118,000 in unpaid alimony, according to filings in state
court.
"He owes you a ton of money. He's jerking you around," the judge
in Mr. Corso's divorce case told his ex-wife earlier this year. "If
you can get him to Connecticut, we'll be happy to lock him up for
you."
In many ways, the penny-stock market—where thousands of
companies trade with little regulatory oversight and prosecutors
say fraud is rife—is the perfect hiding place for someone not eager
to be found.
OTC Markets Group Inc., which operates trading platforms for
penny stocks and other companies, doesn't vet the credentials of
the accounting firms used by those companies, according to a
spokeswoman. Cromwell Coulson, OTC Markets' president and chief
executive, said his company's aim regarding what is known as its
pink market for penny stocks and other risky securities is "to get
as much transparency as possible."
Mr. Coulson said accountants aren't generally the bad actors in
penny-stock fraud but instead, in those instances, are often just
"the lazy guys" who don't do the required due diligence.
The companies Mr. Corso has worked for include at least two
stocks that carry the skull-and-crossbones symbol used by OTC
Markets on its website to warn investors to be careful for various
reasons, including fraud investigations at the companies.
The share price of another of the companies has swung between
less than two cents and $1,490 in the past two years, after
allowing for a reverse stock split. Wild share-price gyrations like
this are a well-known feature of the penny-stock markets.
It isn't clear how much Mr. Corso is earning from his accounting
work, nor is it clear how much he has paid in restitution.
A financial statement he filed in state court in 2011, as part
of his divorce from his former wife, showed his weekly income as
more than $6,000.
Mr. Corso's return to auditing is the latest bizarre chapter for
the son of Italian immigrants.
He worked as a licensed accountant for a decade before
prosecutors in 2002 got a warrant to arrest him over the theft of
more than $5 million from his clients, according to court records.
In many cases, he simply banked money his clients sent him to cover
their taxes, court records show.
One of his victims was sportscaster Dan Patrick, who lost more
than $800,000, most of which was reimbursed by insurers. Mr.
Patrick declined to comment via a spokesman.
Another victim, Charif Souki, the chief executive of a Texas
energy company, said he doesn't expect any money from Mr. Corso.
"He has no way to ever repay me," Mr. Souki said. The accountant
stole $465,291 from Mr. Souki, of which $410,000 was later repaid
by insurers.
Prosecutors said that while Mr. Corso was an accountant in New
York, he lived a second life in Las Vegas, where he suffered what
the government called "considerable" gambling losses.
After being confronted by federal agents over his theft, Mr.
Corso agreed to cooperate in the hopes of reducing his sentence.
For years, he taped mobsters at venues including the Crazy Horse
Too topless club. Acting as a Mafia associate, he informed on
people tied to organized crime in Russia as well as in several U.S.
cities, including Boston and Youngstown, Ohio, prosecutors said. He
even provided evidence for a penny-stock fraud case.
Louis Eppolito and Stephen Caracappa, the two former New York
policemen dubbed the "Mafia cops" by the tabloids, are serving life
in prison after being convicted of eight counts of murder. Mr.
Corso was one of the star witnesses at trial.
At Mr. Corso's sentencing, U.S. District Judge Janet Hall said,
"I can't find the words to describe the value, at least in my
judgment, of this cooperation."
Judge Hall gave Mr. Corso a big discount on the 7½ -year prison
sentence that could have been given under federal guidelines, and
he ended up serving less than a year behind bars. Mr. Corso said he
had paid a heavy price in terms of his career. After rising from
his working-class roots to become a certified public accountant in
a big firm, "I…threw it all away," he told the court. "I could
never ever, I will never ever, be a CPA again."
According to company filings reviewed by the Journal, Mr. Corso
had already posed as a certified public accountant under his new
name at least once by that time. After his release from prison, he
developed a new ré sumé that cites a CPA license among a list of
impressive credentials, including an economics degree at Cornell.
The Journal could find no record of him having these
qualifications. A spokesman for Cornell said it had no record of
someone with Mr. Corso's new name attending the university.
Write to Jean Eaglesham at jean.eaglesham@wsj.com
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