A federal court jury in Los Angeles has acquitted three Southern California men on charges of scheming to defraud stockholders of a Montana firm by fraudulently transferring and selling several hundred thousand shares of the company's stock.
Robert George Paduano, 43, of Newport Beach and Nicholas Nardi, 66, of Chatsworth were acquitted at mid-day Friday on all charges in a seven-count indictment handed down in May. The third defendant, Michael A. Rizzitello, 59, of Canoga Park, was acquitted Thursday night.
Jury member Robert Delahoussaye of Santa Barbara said after the acquittal verdicts that the government had failed to convince jurors beyond a reasonable doubt that the defendants had conspired to defraud General Enertech Corp.
Attorney Anthony P. Brooklier, who represented Paduano, said that after talking to members of the jury, his impression was that they thought John Brownfield, a key witness who was convicted in an earlier Enertech trial this year and then testified for the government, had not told the three defendants of illegalities committed by others in Utah.
Brownfield and two stock transfer agents in Utah, John Badgers and Duane Knigge, were convicted of conspiracy charges in February after an eight-week trial in federal court in Los Angeles.
A federal grand jury indictment, returned after a two-year investigation, accused Paduano, Nardi and Rizzitello of securing the illegal transfer of more than 400,000 shares of Enertech stock, worth nearly $3 million, by bribing an official of a stock registration and transfer firm and then selling the shares for about $144,000.
The indictment charged that 200,000 shares were transferred to Tangible Investments Inc., headed by Nardi. Another 11,000 shares were transferred to a Tustin firm, headed by Paduano, who was linked to organized crime in a 1978 state attorney general's report.
During the trial, Rizzitello, a reputed West Coast Mafia leader, was released from a Texas prison, where he had served a four-year term for a 1980 conviction on charges of trying to take over Los Angeles' pornography and bookmaking rackets.
The case against Paduano, Rizzitello and Nardi was prepared and prosecuted by the U.S. Justice Department's Organized Crime Task Force.