INDIANAPOLIS – A stock market speculator who gained illegal access to dozens of initial public offerings for mutual savings banks–including five of former credit unions–was sentenced to 20 months behind bars for his role in the scheme.
Mark Ristow, 63, also was ordered to repay more than $2.8 million in illegal profits he earned from the scheme, under which he and two accomplices were able to obtain over allotments in the hot IPOs. He is scheduled to surrender to authorities on March 10.
Ristow, an Indianapolis real estate investor, paid his 41-year-old cousin, Andrew Crabb, and his 49-year-old sister-in-law, Susan Gitlin, to take out deposits–often with phony addresses–in hundreds of institutions targeted to go public.
In one instance, the group created a phony business they tried to use to gain membership in Affinity FCU, a $1.4-billion New Jersey credit union that was rumored at one time to be considering a switch to bank. In another, the group was turned away from a Miami credit union, believed to be Eastern Financial Florida CU, but then created a fake Florida address at a post office box that qualified them for membership.
Among the deals accessed by the group were: First PacTrust Bancorp (Pacific First FCU), which went public in August 2002; Synergy Financial Group (Synergy FCU) which went public in September 2002; Rainier Pacific Financial Group (Rainier Pacific CU) October 2003; and Citizens Community Bancorp (Citizens Community FCU), which issued stock twice in a so-called two-step conversion (2004 and 2006).
The case and three others with similar circumstances confirmed what many in the credit union movement had suspected for years–that outside investors are scheming to gain membership to credit unions that are rumored to be considering a conversion to mutual savings banks in order to qualify for preferential access to IPOs.
At least two other speculators also have been sentenced to prison in related cases.
