PIERCE O’DONNELL’S “BASQUIAT FINANCIER” PAL “LEE” AVOIDED AN $8.6 MILLION SEC JUDGMENT BASED ON THE “SWORN REPRESENTATIONS IN HIS STATEMENT OF FINANCIAL CONDITION” DATED JANUARY 22, 1999; But Less Than Five Years Later, “Lee” Mangan & His Wife Were Living In A 5,500 Square Foot Boulder, Colorado, Home

The man who masterminded a whopping stock scam walked away from “$8,675,270 in disgorgement, plus prejudgment interest” by pleading poverty.

The man described in the Orlando Museum of Art’s Basquiat catalog by Pierce O’Donnell simply as “Lee” is actually John Leo Mangan III — a man whose criminal activity began in the late 1970s.

In October 1996, Mangan (known then as “Leo J. Mangan”) was chief executive officer of Comprehensive Environmental Systems Inc., based in West Babylon, New York.

Mangan was one of six men, including a former lawyer for the Securities and Exchange Commission, that were arrested and charged with securities fraud for allegedly hiding their control of two small companies and inflating the companies’ stock prices.

Mangan (shown above at far right) was accused of swindling the firm by manipulating its stock and funneling money overseas through Canadian banks. Mangan, and two other defendants (Grant Curtis and Timothy Masley) were charged with issuing millions of shares of discounted stock, either in the names of fictitious people, real people unaware that the stock was being issued in their names, or people acting under their direction.

The discounted stock, some obtained for as little as a dime, was then funneled into accounts shared by Mangan, Curtis and Masley in Canada and Britain and later sold at prevailing stock market prices, the indictment said.

Comprehensive’s connection to the massive stock fraud scheme began in mid-1993 when Mangan was named the company’s chief operating officer.

What investors did not know, and what should have been revealed in SEC filings, was that Mangan had a criminal record, including eight arrests, the earliest dating to 1972 and the most recent in 1991. Most of the arrests involved drug possession and distribution.

Leo Mangan pleaded guilty to three criminal counts and accepted five years of probation to settle allegations of defrauding investors and not telling securities regulators of his 1979 and 1991 federal drug-trafficking convictions.

But he didn’t have to pay the SEC a nickel.

And, in 2004, less than five years after pleading guilty, he and his wife moved into a 5,500 square foot Boulder home.

Hmmmm?