Forbes Magazine reported Oct 27, 2006 that his company, Giuliani Partners, is entangled in petty penny stock deals and unseemly financing projects. Giuliani Partners has:
(1) accepted fees from over-the-counter penny stocks, (2) formed financial pacts with businesses and individuals that have come under scrutiny by regulators and law enforcement officers. Forbes cited a number of deals that might be perceived as being illegal.
Forbes cited Giuliani Partners foray into Lighting Science Group. Giuliani's banking arm took a warrant for 1.6 million shares at 60 cents, a fee of $150,000 and a promise to raise cash. The firm went bankrupt. It's lost $412,000 on sales of $137,000 in its last six months.
Another venture is CamelBak, maker of a hands-free canteens for Marines in Iraq. It started out under Giuliani's consulting arrangement with $31 million in sales, but got run into the ground with various missteps, including having as a board member, the disgraced Bernie Kerik who pled guilty to having mob ties.
Forbes said Giuliani's most controversial deal was throwing in with a 2004 project with Applied DNA Sciences, which promised to outsmart counterfeiters by inserting bits of DNA from plants into cosmetics and pills to prevent bootleg versions. Its head, Richard Langley Jr., however, had a shady past, having pleaded guilty to conspiracy to commit wire fraud and commercial bribery in another penny stock scam.
An audit of Giuliani Partners may find its principles engaged in establishing secret offshore bank accounts outside the purview of the IRS, engaged in casual accounting practices, and non-existent financial oversight.
Then came the book deals, the speaking tours scheduled by Washington Speakers Bureau, 1663 Prince Street, Alexandria, VA 22314 USA, and the partnership at a powerful Washington lobbying house.
None, however, would prove more lucrative than the small consulting firm Giuliani and a dozen of his most trusted aides founded in 2002 in an angular glass tower at 5 Times Square.
Most of the firm's top executives were in the mayor's "kitchen cabinet," including Bernard Kerik, his former police chief; Michael Hess, who served as the city's top lawyer; Anthony Carbonetti, chief of staff from '99-'01; Daniel Connolly, special counsel to the city's Law Department from '97-'01; Thomas Von Essen, former FDNY commissioner; and Dennison Young Jr., chief counsel during Giuliani's eight years as mayor.
Since its startup in 2002, Giuliani Partners has formed several subsidiaries, including an investment bank called Giuliani Capital Advisors - since sold - Giuliani Compliance Japan and security companies called Giuliani-Kerik and Giuliani Security & Safety, which replaced Giuliani-Kerik and Giuliani Security & Safety Asia.
By the time Giuliani declared his first losing run for president, his namesake firm had grossed an estimated $100 million. The ex-mayor himself was worth of as much as $66 million.
But on the campaign trail he was fending off questions about the shady clients, disgraced employees and murky business decisions.
Nobody has been more problematic than Kerik, who rose from a job as Giuliani's driver during his 1993 mayoral campaign to head of the city's Correction Department and finally police commissioner. At Giuliani Partners, Kerik headed an affiliated security-consulting company. Controversy erupted after Giuliani recommended Kerik to President Bush, who nominated him be Homeland Security chief in 2004. Kerik abruptly withdrew his name, blaming tax issues involving a nanny, but reports soon surfaced about stock-option windfalls, connections with people suspected of dealing with the mob and extramarital affairs.
REFERENCES Michael Hess, Senior Managing Director, Giuliani Partners LLC. Richard Langley Jr, (pled guilty to conspiracy to wire fraud and commercial bribery in penny stock scam). Bernard Kerik is in jail
ROOTY'S POLITICAL FUND RAISING ARM
John Gross Treasurer
Solutions America PAC, 575 8th Avenue, New York, NY 10018
911 FOUNDATION-- raised $4 million (that we know of); fronted by Rooty's then-mistress (now his third wife).
Rudy using offshore accounts for stock fraud? Perhaps he learned from his donors?
Texas tycoon Sam Wyly and his brother Charles have just been charged by the SEC with fraud. The SEC alleges that the brothers got $550 million in undisclosed gains while sitting on public boards and that they then hid the money in an elaborate sham system of trusts and subsidiary