Feds: Con Ran Scam from Inside Prison

Feb. 27 -- For some people, even being in prison is no barrier to pursuit of the good life.

A Long Island, N.Y., man is charged with running a multimillion dollar securities scam from a state prison, allegedly using his earnings to pay off his debts, pad his bank account and buy his daughter a Mercedes-Benz.

Ira Monas, 55, was sent to Adirondack Correctional Facility in Ray Brook, N.Y., on Oct. 29, 1999, about the same time he allegedly began the scheme in which federal prosecutors say he bilked investors of several million dollars.

If convicted on the three-count indictment, he could face up to 30 years in prison and fines of $3 million, or twice the amount lost by the investors. He was arraigned Friday in U.S. District Court in Manhattan.

He allegedly told investors they were buying shares in such oversubscribed initial public offerings as United Parcel Service, Fogdog, and Freemarkets, all of which were declared effective by the Securities Exchange Commission in in November and December 1999. Neither Monas nor his investment advisory company, Milan Capital, Inc., of Meville, N.Y., nor AC Financial, the Pittsburgh, Pa., broker he also owned had any access to the IPOs.

Despite being in prison on unrelated grand larceny and forgery charges, Monas was able to continue to run his business by making daily phone calls from the common room, apparently fooling his employees by telling them he was calling from Europe, from a crowded restaurant or saying he had been injured to explain his continued absence.

Federal and state prison officials say it is very hard to control how inmates use the telephones. While corrections officers can listen in on phone calls, unless they have a good reason to think an inmate is involved in criminal activity, they generally will not.

According to the indictment, Monas took full advantage of the leeway allowed him.

Man of Mystery

From his upstate New York minimum security prison, federal prosecutors say, he not only convinced unwitting victims that he had access to stock offerings that had already been gobbled up, he kept his employees in the dark about where he was.