A lawyer who created a $100 million share scam in order to lead a life of luxury has been convicted of grand larceny - and faces up to 25 years in prison.

James W. Margulies made his illicit millions via a securities fraud - a so-called "pump and dump" scheme - which artificially inflated the price of stock in Industrial Enterprises of America Inc., a company at which he was corporate counsel and briefly CEO. Marguiles, in league with fellow exec John D. Mazzuto, issued tens of millions of shares to friends and family, which were immediately sold to bump up their value. More shares were then issued and flogged to investors at the inflated price, including Yale University, a teachers' pension fund and the Methodist Church (you can find a full explanation of their shenanigans here).

Marguiles is alleged to have used the profits to fund a life of private jets, pricey homes and inordinately expensive diamond rings for his wife. In all, it's estimated that he spent $7 million on funding the good life, including $2 million on real estate alone. Which isn't really very subtle.

    Another commute to the office for James W. Margulies 
 
After six weeks in the dock, including testimony from Mazzuto - who cut a deal with prosecutors to reduce his own sentence - Marguiles was convicted on 30 counts of grand larceny in the first degree, and will be sentenced on 9 August. Mazzuto - described by Marguiles' lawyer as "one of the grand scamsters of our generation" - has been told to expect a one to three year jail term.

Meanwhile, Baker & McKenzie has also been dragged into the murky tale, as Industrial Enterprises of America is now suing the firm for $600 million. A former Bakers partner - Martin Weisberg (now seemingly untraceable but previously indicted for securities fraud) - is alleged to have created the legal structure which allowed the scam to take place.
 
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