Shearson Lehman Cleared in Sports Gambling Case

A federal jury Wednesday acquitted Shearson Lehman Bros. but convicted five of six other defendants in what prosecutors called a multimillion-dollar sports gambling business.

The government had contended that Shearson, one of the nation’s largest investment firms, set up three accounts used by the gambling operation to launder money. It alleged that one account was opened in the name of a man who also was found innocent.

“We’re elated at this point. We never felt we should have been charged,” said E. Lawrence Barcella Jr., attorney for Shearson.

“We accept the jury’s verdict as we must,” said Assistant U.S. Atty. Glenn Bronson.

U.S. District Judge Anthony Scirica allowed those convicted to remain free on bail and did not set a sentencing date.

Among those convicted was Joseph Mastronardo Jr., son-in-law of Republican mayoral candidate and former Mayor Frank L. Rizzo, who was found guilty on 11 counts.

The government said Mastronardo’s gambling business converted its profits into checks of less than $10,000, which were deposited in Shearson-Lehman accounts.

By purchasing checks in amounts of less than $10,000, according to the government indictment, the organization deceived and defrauded the Internal Revenue Service. Federal law requires financial institutions to report cash transactions greater than $10,000.