Sentence upheld in securities fraud case

Tuesday, July 24, 2001 | 10:28 a.m.

A federal appeals court Monday upheld the sentence of a man who pleaded guilty in Las Vegas to a securities violation involving a nationwide scheme to promote certain stocks by bribing brokers and stock promoters.

Steven Trapp pleaded guilty to conspiracy to commit securities fraud in July 1997 and was sentenced to four months in prison and four months of home confinement, to be followed by two years of supervision when released.

Trapp complained in his appeal the government breached its plea agreement that it would recommend home confinement without prison time. The U.S. Probation Office initially agreed to the home confinement recommendation but then found there were other criminal allegations against Trapp in Kansas. It then changed its recommendation.

The 9th U.S. Circuit Court of Appeals, in upholding the prison sentence, said the government based its initial recommendation on the facts known at that time. But it later discovered new information about pending criminal charges in Kansas.

Trapp and 10 others were indicted by a federal grand jury in Las Vegas in November 1996 on charges of paying brokers cash or stock in return for them recommending Teletek, United Payphone and Enrotek stock to their clients. They were charged with securities fraud, wire fraud and money laundering.

Trapp pleaded guilty to a lesser charge.