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Merrill Lynch embezzler now faces bankruptcy woes

By Dave Collins

Associated Press

Published: Sunday, July 22 2012 10:14 a.m. MDT

Gordon's bankruptcy case remains pending in federal court in Manhattan.

Dubbed a "whiz kid" in news stories, Gordon was only 23 when he was named president of Merrill Lynch's energy trading division in 2000, two years after he joined the Manhattan-based division after getting a master's in economics from Yale.

The government said Gordon fooled Merrill Lynch into paying a one-time $43 million premium insurance payment that the company thought would guarantee it could buy energy it might need, but the money went into offshore accounts Gordon controlled. He pleaded guilty to wire fraud, money laundering and conspiracy in 2003.

He was also accused of helping the accounting fraud that brought down Enron Corp. He settled those charges with the Securities and Exchange Commission without admitting or denying them and was barred from serving as an officer or director of a public company.

Over the past 11 years, Gordon has controlled or held an interest in more than 30 companies, court records show.

One of those companies, Wurk-Times Square, leases two floors in a building in Times Square for more than $5 million a year and subleases them out to other businesses, court records show.

Another of Gordon's companies, RC Sooner Holdings, is in bankruptcy in federal court in Oklahoma after having acquired eight apartment complexes with nearly 800 units in Tulsa, according to court records. Documents show that RC Sooner paid nearly $1.2 million for the apartments in October 2009 and assumed nearly $27 million in mortgages held by the previous owners.

In 2008, Allstar Capital acquired a $3.5 million mortgage taken out on a 21-acre parcel of undeveloped land in Groton, Conn., with the help of Michael Thomas, former tribal chairman of the Mashantucket Pequots, who own Foxwoods Resort Casino, court records show.

Under the terms of a proposed settlement, the Groton property would be sold and most of the proceeds would go to Laura Gordon and the bankruptcy trustee.

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