Morgan Stanley ops manager cops a plea in $2.5 million fraud case
10 July 2009 | 10238 views | 0
A former operations manager responsible for payments processing at Morgan Stanley's institutional securities business is to plead guilty to stealing $2.5 million from the US investment bank over a seven-year period.
Richard Garavanta, 36, was arrested in February on an indictment which charged multiple counts of grand larceny, criminal possession of stolen property and falsifying business records over a period stretching from 2001 to 2008..
Garavanta was a vice president in the operations division of Morgan Stanley's institutional securities business with responsibility for processing payments related to corporate actions. As such, he was authorised to request or approve cheques for various payments from one of the company's in-house accounts.
In August 2001, he set up a shell company called NY Transfer Corp., which received some 50 cheques from an in-house Morgan Stanley account for amounts ranging from $8,670 to $74,812. He used the cash to pay for lavish personal expenses, including mortgage payments and refurbishments on a $500,000 house, airline tickets to Aruba and Florida, $109,000 in jewelry purchases, car services and restaurants as well as to make tens of thousands of dollars in cash withdrawals.
Garavanta's crimes were discovered during internal reviews of the in-house Morgan Stanley account while the defendant was on a vacation paid for with stolen money. His salary in 2008 was $125,000 plus a $50,000 bonus. He was fired in January.
At a hearing in New York state court, Manhattan Assistant District Attorney Jeremy Glickman recommended Garaventa spend two to six years in prison, pay restitution of $250,000 and provide a confession of judgment for $2.5 million minus the value of jewelry and other items he would forfeit.