Ex-Mouseketeer’s Defense Blames Fraud on Fiance

Former Disney Mouseketeer Darlene Gillespie was deceived, manipulated and victimized by her own fiance, a man with whom she still lives, her lawyer told jurors in her federal stock fraud trial Tuesday.

Defense attorney Charles Rondeau waited until closing arguments in the case to attack the onetime child star’s lover, Jerry Fraschilla, 61, who has already pleaded guilty in the scheme.

“The fact that she still lives with Mr. Fraschilla demonstrates the power he has over her,” Rondeau said. “It’s not a crime to fall in love with the wrong person.”

Gillespie and Fraschilla were indicted last year on charges of free-riding, a scheme that entails ordering stock with no means or intention to pay for it. They also were accused of opening accounts in the name of a fictitious investor and forging documents to obstruct a Securities and Exchange Commission probe.

Testifying in her own defense last week, Gillespie, 57, blamed two stockbrokers and her former bookkeeper, now dead, for a series of bad checks she wrote to buy thousands of dollars worth of highly speculative stock on credit.

Although Gillespie testified that she relied on Fraschilla for advice in her stock investments, she carefully avoided blaming him for her legal woes during two days of questioning by her lawyer last week.

In his closing arguments to the jury, Assistant U.S. Atty. Jack S. Weiss seized upon the defense lawyer’s attempt to cast Gillespie as a pawn in the hands of Fraschilla.

He noted that Gillespie had made no such claims during her testimony. He accused her of shifting blame from one person to another rather than taking responsibility for her misdeeds and “letting the chips fall where they may.”

“At its core, ladies and gentlemen, this case comes down to a series of lies,” Weiss said, “and this defendant has shown that when one lie isn’t working, she’ll shift to another.”

After hearing the lawyers’ arguments, the jury received instructions from U.S. District Judge Lourdes Baird and retired to begin deliberations.

Gillespie faces charges of conspiracy, securities fraud, mail fraud, perjury and obstruction of justice.

Much of the trial testimony focused on dealings between Gillespie and Gary Handler, a broker at Oppenheimer & Co.

In his closing argument, Rondeau accused Handler of arbitrarily withholding $18,000 to which Gillespie was entitled when he learned that she was changing brokers. As a result, he contended, Gillespie wound up issuing a bad check to her new broker at Advest.

But Weiss pointed out that in four letters to Oppenheimer after the alleged incident, Gillespie never once mentioned the $18,000.

He also displayed to the jury a letter that Gillespie wrote to Advest, blaming a foul-up at Bank of America--not Oppenheimer--for the bounced check.

Both sides also traded allegations over a letter that the government claims Gillespie forged to obstruct the SEC investigators.

The letter purported to be written on Oppenheimer stationery and signed by Handler. It advised Gillespie to ignore any margin calls issued by the broker’s home office, touted the stock she was buying as a good investment, and promised that she would not be subject to any further margin calls unless the stock price fell below $6 a share.

Rondeau cited the testimony of an FBI analyst who said that he did not find Gillespie’s or Fraschilla’s fingerprints on the document. The defense lawyer also contended that the letter contained information that only Handler could have known about Oppenheimer’s ownership of a certain stock.

Handler, appearing as a government witness, denied writing the letter.