Harold Bailey (B.J.) Gallison II and several of his cohorts from Costa Rica, Las Vegas, Miami, and New York have been charged with running an international stock scam, according to the FBI in a news release sent out today (July 14).

Gallison was the son of two La Jolla socialites who were frequently featured in the society columns of Burl Stiff, the late amanuensis of the Beautiful People for the Union-Tribune. Harold Bailey Gallison Sr., former executive director of the La Jolla Town Council, loaned money to his son to start a brokerage, La Jolla Capital, later named Pacific Cortez Securities. It operated in the 1990s.

Dealing heavily in penny stocks, the brokerage was a bucket shop with which Gallison's mother, Janet, was involved, according to a source in the San Diego district attorney's office. The California Department of Corporations in 1999 decreed that the brokerage should be shut down for widespread breaking of securities laws. A court-appointed monitor confirmed that the brokerage's books were cooked. When it was shut down, creditors got 2.5 cents on the dollar.

Gallison and several others went to prison for their roles in manipulating a stock named Natural Born Carvers. Upon getting out, Gallison headed an online brokerage house, based in Costa Rica, named GISBeX. Some suspected he had started it while in prison.

Today, the Justice Department's criminal division in Virginia unsealed an indictment against Gallison, now living in Valley Center. It charges him and several others with running a pump 'n' dump scheme on a stock called Warrior Girl. He is also charged with conspiracy to commit wire fraud and securities fraud in the running of another pump 'n' dump scheme.

According to allegations in the indictment, the market manipulation was facilitated through an offshore brokerage and money-laundering platform controlled by Gallison. Defendants allegedly used the platform to create nominee accounts in the names of shell companies, thereby concealing the source and ownership of the securities.

According to the indictment, Gallison told one of his cohorts that the two could hold private conversations through Gallison's internal phone system that "the Fed cannot get a wiretap on."

One of the other defendants, Anna Hiskey, was working as a stripper when Gallison met her in the mid-1990s, according to a source of mine who gave information to the FBI.