‘Mouseketeer’ Portrayed as a Stock Fraud Artist

Darlene Faye Gillespie, an original member of television’s “Mickey Mouse Club,” was portrayed by a prosecutor Tuesday as someone who in midlife morphed into a scheming stock fraud artist, a claim disputed by a defense lawyer who called her the innocent dupe of unscrupulous stock brokers.

In his opening statement before a federal jury, Assistant U.S. Atty. Jack S. Weiss accused the 56-year-old Gillespie of buying stock without the means or intention to pay for the shares and then lying about her activities to the Securities and Exchange Commission.

The ruse, Weiss said, included establishing an account in the name of a fictional investor, writing checks on closed or nonexistent bank accounts and forging a letter to obstruct the SEC’s probe.

“This case is about an elaborate series of lies--lies this defendant told her stock brokers to make money, lies she told the Securities and Exchange Commission to thwart their investigation.”

Playing on that theme, defense attorney Charles Rondeau agreed that “this is a case about lies,” but the liars, he insisted, are government witnesses who are trying to deflect attention from their own misdeeds.

“The government is not going to be straight with you about the facts,” Rondeau told the jurors.

He said Gillespie was exploited by stockbrokers. “My client is not the perpetrator,” he told the jury. “She was the unknowing participant in what may have been criminal activity.”

He said the brokers violated SEC regulations and then tried to cover their tracks when the agency launched an investigation into an unusual pattern of buying and selling of thinly traded Unique Mobility, an American Stock Exchange stock in which Gillespie and her boyfriend, Jerry Fraschilla, 61, traded extensively.

Fraschilla was sentenced last month to 18 months in federal prison after pleading guilty.

The couple were arrested at their Oxnard home a year ago on charges of security fraud, obstructing justice, conspiracy and perjury.