2 Of Broker's Clients Identified As Losing Millions
February 7, 2002 at 6:53 PM EST - Updated June 30 at 1:05 AM
CLEVELAND (AP) - A Mr. Coffee Inc. co-founder and the president of the Cleveland chapter of the NAACP lost millions of dollars in an alleged investment scheme, their attorney said.
The FBI is looking for broker Frank Gruttadauria, 44, who told authorities in a letter that lax supervision made it possible for him to misappropriate money over a 15-year period. Authorities said investors may have lost at least $100 million.
Businessman Samuel Glazer, a Mr. Coffee co-founder, lost about $30 million and George Forbes, head of the local National Association for the Advancement of Colored People and a former president of Cleveland City Council, lost more than $1 million, according to their attorney Robert Duvin.
"I don't stay awake at night worrying about it," Forbes told The Plain Dealer.
The two were among the broker's biggest clients -- many of them wealthy Cleveland-area power brokers -- in what investigators now believe was an elaborate scheme.
Gruttadauria is suspected of having account statements for about 25 clients mailed to his post office box. Then he allegedly forwarded falsified statements that inflated the value of client accounts.
Gruttadauria, who managed Lehman Brothers' Cleveland office, left a letter for the FBI before he and his passport disappeared on Jan. 11. He said in the letter that he acted alone and didn't take money for personal use.
The FBI, U.S. Securities and Exchange Commission, National Association of Securities Dealers and the broker's former employers are investigating.
Gruttadauria is officially no longer an employee of Lehman, company spokesman William Ahearn said Wednesday.
The nation's fourth-largest investment firm hopes to settle with investors to avoid lawsuits or arbitration cases, Ahearn said.
(Copyright 2002 by The Associated Press. All Rights Reserved.)