Pair Plead Not Guilty in Securities Case

Two Ventura County residents recently indicted by a federal grand jury in an alleged securities fraud scheme pleaded not guilty Monday to 26 counts in a federal courtroom in Los Angeles.

Darlene Faye Gillespie, 56, one of the original members of the Mickey Mouse Club, and her fiance, Jerry J. Fraschilla, 60, are scheduled to appear before U.S. District Court Judge Lourdes G. Baird on Friday, when a trial date is expected to be set, said Assistant U.S. Atty. Jack S. Weiss.

Gillespie is free on $25,000 bail. Fraschilla remains in federal custody in lieu of $50,000 bail.

The couple was arrested last week at their Oceanaire Drive home in Oxnard on charges of conspiracy, securities fraud, mail fraud, obstruction of justice and perjury.

They are charged with a fraudulent stock-buying practice known as “free riding,” in which they allegedly purchased stock in 1992 and 1993 without the means or intention of paying for it.

Gillespie’s Pasadena-based attorney Terry Amdur said he received the case Monday and had yet to speak with his client.

“It’s an unusual case,” he said, “at least the scheme alleged in this indictment is unusual.”

Fraschilla and Gillespie are accused of opening accounts at six brokerage houses under the name of Michael Andrews--a fictitious character--and in the names of companies they controlled. Many of the more than 194,000 shares of Unique Mobility Inc.’s common stock they purchased were under so-called margin agreements, effectively borrowing money from the brokerages to pay for the trades, authorities said.

The indictment alleges that the pair attempted to pay for the shares with checks on closed and overdrawn bank accounts.