Bulgarian NY Broker Tzolov Pleads Guilty in Fraud Case

Crime | July 22, 2009, Wednesday // 23:41
Bulgarian NY Broker Tzolov Pleads Guilty in Fraud Case: Bulgarian NY Broker Tzolov Pleads Guilty in Fraud Case Assistant US Attorney Greg Andres said the investor losses from Tzolov's scheme are believed to exceed USD 400 M. Photo by daylife.com

Bulgarian Ex-Credit Suisse Group broker Julian Tzolov has pleaded guilty Wednesday to criminal charges in a scheme involving auction-rate securities.

Tzolov pleaded guilty to three indictments at a hearing before US District Judge Jack Weinstein in Brooklyn, New York, including charges of conspiracy, securities fraud, bail-jumping, visa fraud and multiple counts of wire fraud.

"With respect to all of my criminal conduct, I knew at the time that my actions were in violation of the law. I knew they were wrong," Tzolov said. "I am truly sorry for my conduct."

Sentencing is set for October 27. 36-year-old Tzolov, faces a maximum of 20 years in prison on each fraud count and federal sentencing guidelines call for a life sentence. He will be deported to Bulgaria after he completes his sentence, the Wall Street Journal reported.

The plea came on the same day the criminal trial was scheduled to begin against Tzolov and Eric Butler, both formerly of Credit Suisse Securities (USA) LLC.

Assistant US Attorney Greg Andres said the investor losses from Tzolov's scheme are believed to exceed USD 400 M.

During his plea Tzolov implicated Butler, saying they made statements "which mislead or were intended to mislead clients about the nature of the securities purchased on their behalf."

"Eric Butler and I told clients we would only purchase auction-rate securities backed by student loans, when we did buy securities not backed by student loans," Tzolov said.

Butler, 37, is separately facing charges in Brooklyn of conspiracy to commit securities fraud, securities fraud and conspiracy to commit wire fraud. He has denied wrongdoing.

In a statement Tuesday, Credit Suisse said, "In 2007, we informed our regulators of these individuals' activities. We have and will continue to assist the authorities in their work."

On Monday it was revealed that Bulgaria's State Agency for National Security (DANS) ordered the collection of information about the activities, property and assets in Bulgaria owned by Tzolov.

Bulgaria-born Tzolov was declared a fugitive by US federal prosecutors in June pursuing alleged fraud involving auction-rate securities.

He was caught by Spanish authorities in the middle of July with the assistance of the Federal Bureau of Investigation, after fleeing jurisdiction.

 

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Tags: Julian Tzolov, Credit Suisse, broker

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