Suite Scams

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David Esseks, a former prosecutor, says a fancy address can lend credibility Jens Umbach/Keiko Represents

A cease-and-desist letter from accounting firm Ernst & Young to Sucarato

Gottschalk claims she and her husband were tricked into giving Sucarato $450,000 Bill Cramer/Wonderful Machine

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In the past five years the U.S. Postal Inspection Service has opened 12 mail-fraud investigations into businesses that used the 22nd floor of 67 Wall Street as their address--more than any other location in the financial district. The building's colorful past is so well-known that it has even sparked a discussion thread on the Silicon Investor message board called "67 Wall Street: The Home of Many Scams." "I've been working fraud cases for 20 years, and 67 Wall Street is an address with significant problems," says U.S. Postal Inspector Sara A. Levinson, who worked for the agency in lower Manhattan before heading its fraud investigation team in Brooklyn. SRI's Luber contends his former space at 67 Wall was no more scandal-prone than similar facilities: "If we get wind of fraud, they're gone." The owners of 67 Wall did not return calls for comment.

PHANTOM RÉSUMÉ

The 22nd floor of 67 Wall Street provided the perfect stage for Sucarato. It looked like any other posh office in lower Manhattan. Neatly arranged magazines covered the oak-finished table in the waiting room. A cheerful receptionist at the front desk greeted visitors while a handful of other people sorted through a growing pile of faxes and letters. Investors say Sucarato, who occasionally invited clients to meet him there, gave the impression that his firm occupied the entire floor--a charade he could pull off since no companies were listed on the office doors or walls. His venture even seemed to have national reach, with a sister office in Chicago's Loop at 70 West Madison Street.

Sucarato had all the superficial markings of a high-powered money manager. His Web site, featuring real-time market updates, trumpets his years as a broker and stockpicker. The site even includes a photo of his team of two dozen traders hard at work. In person, he spoke with cocktail party ease about his trading strategies and his multibillion-dollar portfolio.

It was nothing more than a shiny veneer. There was no trading desk or Bloomberg terminal on the floor at 67 Wall. (Sucarato says his two dozen traders worked out of their homes.) None of the support staff at the facility reported to Sucarato; they were all employees of SRI, the suite's operator. His Chicago location: a virtual office managed by Regus Group, a publicly traded London-based firm and the single biggest player in the virtual office and executive suite industry.

His other credentials are just as flimsy. Sucarato claims to have earned an undergraduate degree in finance and economics from New York University in 1992. But school officials say no one by that name ever graduated from NYU. The NASD, now called the Financial Industry Regulatory Authority, booted Sucarato out of the securities business a decade ago, after he failed to cooperate with an investigation into a customer dispute. The incident stems from his brief tenure as a broker at JB Oxford, a now defunct firm.

Sucarato also liked to talk up his position on the BusinessWeek Market Advisory Board. But that's an opportunity offered to anybody who registers at this magazine's Web site. And despite his assertions of the fund's success, he and his wife gave up their New Jersey apartment and moved in with his in-laws in Westchester County, N.Y. A check he wrote to his former lawyer, Gary Mason, bounced this summer, according to court documents.

Sucarato walked away from his lease at 67 Wall Street in July. Two months later, says SRI's Luber, federal authorities showed up, asking questions about the fund manager. A virtual nomad for a while, Sucarato eventually relocated last December to 501 Fifth Avenue, another virtual office in midtown Manhattan run by Corporate Office Park. A representative for the company says Sucarato "is there every day."