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Ex-Merrill Broker Indicted on Theft, Bought Ferrari

A former Merrill Lynch broker in Manhattan has been arrested and charged with 11 counts related to his alleged theft of $780,000 from the company, some of which was used to buy a Ferrari, Manhattan District Attorney Cyrus Vance said Tuesday.

Prosecutors accused Steven Mandala, 29, of overstating his employment history in persuading Merrill to hire him in April 2009, and then using $245,580 from a $780,000 loan he obtained from the company at the time to buy the car. Mandala resigned from Merrill last June 29, prosecutors said.

Mandala was charged with one count each of grand larceny and money laundering, two counts each of identity theft and criminal possession of a forged instrument and five counts of falsifying business records.

Frank Rothman, a lawyer representing Mandala, said his client pleaded not guilty before New York State Supreme Court Justice Daniel FitzGerald.

Bail was set at $500,000, and the defendant is being held in jail, Rothman said. A hearing is set for March 10. Rothman said Mandala "will take steps to make Merrill whole," and will soon relinquish the Ferrari.

Merrill is part of Bank of America . Spokesman Bill Halldin said Merrill obtained a court order to freeze $300,000 of Mandala's assets, and is seeking to recover other assets.

Prosecutors said Merrill hired Mandala after the defendant falsely claimed to be a partner with Maxim Group who oversaw $300 million of client assets, generated $1.5 million of annual revenue, and was paid $765,000.

After getting the loan, Mandala bought the Ferrari in his father's identical name, prosecutors said. The defendant then rarely showed up at work, and brought in only a handful of clients with about $20,000 of assets, they said.

Mandala faces up to 15 years in prison on each grand larceny and money laundering count, up to seven years on each identity theft and criminal possession count, and up to four years on each count of falsifying records. The defendant lives in Manhattan's Chelsea district, prosecutors said.