(Bloomberg News) Julian Tzolov, a former Credit Suisse Group AG broker who fled prosecution before pleading guilty to securities fraud, was sentenced to four years in prison after initially getting a five-year term earlier in the day.
Tzolov, 38, was sentenced today by U.S. District Judge Jack B. Weinstein in Brooklyn, New York. He was accused of fraudulently selling securities that cost corporate clients more than $1.1 billion. Before sentence was passed, Tzolov said he regretted his decision to run away.
"I have been going to bed at night and waking up every morning not being able to forgive myself, how I could let fear cloud my judgment and let down people who have been treating me honestly and professionally," Tzolov told the judge. "I made the most colossal mistake of my life."
The judge cut the original five-year term after recalculating the penalty for bail jumping, according to Benjamin Brafman, a lawyer for Tzolov, and Robert Nardoza, a spokesman for the U.S. Attorney's Office.
Tzolov, a native of Bulgaria, was returned to New York from Spain in July 2009 after fleeing for three months. Tzolov pleaded guilty when he returned to the U.S. and has been in custody since. He testified as a prosecution witness against Eric Butler, his former partner. The jury found Butler guilty in August 2009. Weinstein sentenced Butler, 39, in January 2010 to five years in prison. Butler is free on bail while he appeals his conviction.
Weinstein sentenced Tzolov to 2 1/2 years for securities fraud, two conspiracy counts and seven wire-fraud counts. He added another 1 1/2 years, to run consecutively, for bail jumping. He granted probation for a count of immigration fraud.
"I understand the sentence," Brafman said after the initial hearing. "I'm clearly disappointed but we'll deal with it." Brafman had asked Weinstein to sentence his client to time served. He told Weinstein that his client has essentially been in isolation for two years because he has no family in the U.S.
Tzolov, wearing a blue prison uniform, broke down in tears while discussing his 89-year-old father who is ill and "is in the last stage of his life."
In pleading guilty, Tzolov said he and Butler intentionally misled clients about securities purchased on their behalf, falsely claiming they were backed by federally guaranteed student loans. The men told clients the investments, actually backed by riskier corporate debt and subprime mortgages, were a safe alternative to bank deposits or money-market funds, said prosecutors in the office of U.S. Attorney Loretta Lynch in Brooklyn.