Ex-Paine Webber Executive Guilty of Money Laundering

A former operations manager at a major Paine Webber branch office has been convicted of charges that he participated in a scheme to launder $700,000 in cash, largely for customers in New York’s garment district.

George P. Fahmy, who has been suspended from the brokerage firm since April 2 when he was indicted on two felony counts, faces a maximum penalty of 10 years in prison and $500,000 in fines following his conviction Wednesday by a federal court jury.

The jury acquitted Fahmy’s immediate supervisor, Joseph P. Tota, a former manager of the mid-town Manhattan branch, of related charges. Tota’s attorney said Thursday that although his client has been under suspension from Paine Webber since both men were indicted, he expects to be reinstated shortly. Just before his suspension, Tota had been named Eastern sales manager by the firm, said the lawyer, Frank H. Wright.

The key witness against both defendants was Gary D. Eder, a subordinate of both men who was Paine Webber’s top stockbroker between 1982 and 1986. Eder, the first to be indicted in the scheme, pleaded guilty to two felony counts in March.

Eder and other witnesses testified at Fahmy’s and Tota’s trial that participants in the scheme broke up cash deposits of as much as $72,000 at a time into units of less than $10,000 each for a period between 1980 and 1983.