Billionaire scams for one-million dollars

Dec. 10 (Bloomberg) — Michael Pickens, son of billionaire investor Boone Pickens, was sentenced to probation and continued drug and alcohol treatment for using fake stock tips to dupe investors out of $1.2 million.

With his father watching from the courtroom gallery, the younger Pickens avoided as much as 71 months in prison after making what a Manhattan federal judge said were “tremendous strides” in a New Jersey program he just completed.

U.S. District Judge Loretta Preska ordered Pickens, 53, into a second residential program, closer to his home in Nocona, Texas, and told him to serve five years probation. Pickens, who started drinking at age 13, must also repay $1.2 million to investors.

“This is tough on the family, all of us,” Boone Pickens, chairman of Dallas-based BP Capital LLC, said after the sentencing. “But we are pleased with the outcome.”

Michael Pickens pleaded guilty last year to federal charges that he boosted stock prices by faxing fake tips to unwitting recipients. He admitted sending hundreds of thousands of faxes of what appeared to be a handwritten memo, in which a financial planner urged a client to buy shares in companies Pickens was promoting. The message was made to appear as if it had been accidentally sent to the recipients’ fax numbers.

A year after Pickens’s 2005 federal arrest, he was arrested on Connecticut burglary charges and, his lawyer said, was in the throes of his addiction. Pickens spent 17 months at the Little Hill-Alina Lodge in New Jersey, which its clinical director, Gregory Varley, today called the “Parris Island” of treatment programs, referring to the U.S. Marine Corps training site.

Pickens will now go to the Burning Tree program in Kaufman, Texas, near Dallas.

‘Peaceful’

“I want to apologize to the court for my conduct,” Pickens told Preska. In a letter to the judge, he said he was finally “peaceful.”

Assistant U.S. Attorney Steven Feldman urged Preska to take a harder line on Pickens, who earned hundreds of thousands of dollars from his scheme.

“The false premise here is that his troubles made him commit the crime,” Feldman said in court. “There’s no excuse for it.” Michael Pickens went out to “rip-off unsuspecting investors,” Feldman said.

Boone Pickens, 79, rubbed his eyes as Feldman outlined his son’s crime. “Mike has fought alcoholism his entire adult life,” the elder Pickens told Preska. Though there’d been “a lot of tension” between them, there’s now a “thawing” in the relationship, he said. “It’s the hardest I’ve ever seen him work,” Boone Pickens said of his son.

Fake Research

Prosecutors charged Michael Pickens with two illegal schemes. In one, they said he sold his own stock as its share price rose after he sent faxes containing fake research touting the company.

Separately, Pickens faxed what appeared to be a handwritten memo in which a fictitious financial planner named Chris urged a “Dr. Mitchel” to buy shares in one of three companies, prosecutors said.

“I have a stock for you that will tripple (sic) in price just like the last stock I gave you,” one fax read.

The case is U.S. v. Pickens, 05-CR-793, U.S. District Court, Southern District of New York (Manhattan).