Ex-Morgan Stanley VP accused of $2.5M embezzlement

NEW YORK (AP) — A former Morgan Stanley vice president has been indicted on charges of embezzling more than $2.5 million from the investment bank and spending it on high-end cars, expensive vacations and other personal luxuries.

Richard Garaventa Jr. of Manalapan, N.J., pleaded not guilty Tuesday at his arraignment in Manhattan’s state Supreme Court on 43 counts that include grand larceny, possession of stolen property and falsifying business records.

Garaventa stole the money and used it to buy Mercedes and Lexus cars, purchase expensive jewelry, renovate his home, dine at fancy restaurants and take luxury vacations to Florida, Aruba and other places between Sept. 5, 2001, and last Dec. 24, Assistant District Attorney Jeremy Glickman said.

He said Garaventa, 36, was authorized to approve checks for corporate payments from the company’s in-house accounts.

Garaventa created a company called the New York Transfer Corp. and sent it 50 separate checks in amounts ranging from $8,670 to $74,812, the prosecutor said. The company had no apparent function except to receive the checks, Glickman said.

Garaventa “spent this money almost as quickly as it came in,” Glickman said.

Court papers filed by the prosecutor said Garaventa admitted creating the company and stealing more than $2 million.

Morgan Stanley called Garaventa “a former rogue employee” and said the allegations represented “direct violation” of the firm’s values and policies.

“We reported this matter to the authorities and have provided every assistance to their investigation,” the investment giant said in a statement. The firm declined to provide any more information about Garaventa.

Glickman said Garaventa’s crimes were discovered during internal reviews of the in-house accounts while he was on a vacation paid for with stolen money.

The prosecutor said Garaventa’s 2008 salary was $125,000, plus a $50,000 bonus. Morgan Stanley fired him on Jan. 7.

Defense lawyer Lawrence Fredella says Garaventa maintains his innocence.

“There’s more to this case than meets the eye,” Fredella said, adding, “One might wonder how this might go on for such a long time without being detected by the watchful eye of Morgan Stanley.”

Fredella said Garaventa was prepared to surrender last week, but detectives dragged him out of his home. He said his client waived an extradition hearing and returned from New Jersey.

Garaventa’s bail was set at $1 million, and Fredella said he was still in jail Tuesday night. Garaventa faces up to 25 years in prison if convicted.