Cassandra
13年前
GELV: DOJ action on international boiler room scam.
TWELVE CHARGED IN MULTI MILLION DOLLAR INTERNATIONAL BOILER ROOM SCHEME
FOR IMMEDIATE RELEASE
MAY 18, 2012
BUFFALO, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that a
federal grand jury in Buffalo has returned a 40-count Indictment charging 12 people with
participating in a large scale, international stock boiler room scheme.
Under arrest are: Martin Jones, 48, of Cardiff, United Kingdom, who was arrested
in Barcelona, Spain; Monica Romaszko, 59, of West Seneca, Gene Clark Foland, 53, of
Lighthouse Point, FL, Jeffrey Klein, 57, of Boca Raton, FL, Joel Marcus, 74, of Boca
Raton, FL and Walter Tatum, 54, of Redmond, WA.
All of the defendants are charged with conspiracy to commit wire fraud, which
carries a maximum penalty of 20 years in prison, a fine of $250,000 or both. Jones,
Romasko, Foland, and Klein are also charged with wire fraud, which carries a maximum
penalty of 20 years in prison, a fine of $250,000 or both and conspiracy to launder
money, which carries a maximum sentence of 10 years. Others named in the indictment
are still at large.
Assistant U.S. Attorney Gretchen Wylegala, who is handling the case, stated that
the Indictment charges the defendants with being involved in an investment fraud scheme
located in Barcelona, Spain. The type of scheme operated by the defendants is a
telemarketing operation using the phones and internet to cold call investors as well as
high pressure sales techniques to get them to invest in whatever is being sold. These
operations have been referred to by regulatory authorities as “boiler room” operations.
Regarding particular factual allegations, from February 2006 through July 2009,
Jones and another defendant oversaw a telemarketing operation which used the names
Newbridge International, Brecon Global, Strategic Energy Partners, and Hammerson
Equity Group. These companies were used to sell restricted shares of low value stock to
investors in the United Kingdom and Canada. The stocks included IXSV (Intersecurity
Holdings), UVEC (Universal Energy), RHOI (Rhino Outdoors International), CCTC
(Clean Coal Technology), and GELV (Green Energy Live). Defendants Foland, Klein,
Marcus and Tatum were instrumental in finding the stocks for the boiler room to sell.
The investors were not told that the shares they were purchasing were restricted
shares; that is, stocks that could not be readily resold on the open market. By the time
investors received a printed version of their share certificates, reflecting that the shares
were restricted, the value of the stock had dropped to nearly nothing.
Defrauded investors provided more than $5,000,000 to the boiler room. Defendant
Romaszko opened two bank accounts, one in the Buffalo area, and one in Fort Erie
Canada, into which the investor funds were wired. These monies were then transferred to
various other accounts, in Spain, the UK, Switzerland, and to Klein in Florida.
“This case is yet another example of how the public needs to be extremely careful
with regard to whom they entrust their money,” said U.S. Attorney Hochul. “While law
enforcement should be applauded for their outstanding efforts in uncovering this
sophisticated international fraud scheme, the best defense for the individual investor is
her/his own common sense.”
"HSI will continue working with its law enforcement partners here and abroad to
hold criminals involved in stock fraud accountable for their actions," said James Spero,
Special Agent in Charge of HSI Buffalo. "These criminals demonstrated a callous
disregard for the hard earned money of individuals who thought that they were
legitimately investing in their futures. They will now have to account for their actions
before a court of law."
The Indictment is the culmination of an investigation on the part of Immigration
and Customs Enforcement, Homeland Security Investigations, under the direction of
James C. Spero, Special Agent in Charge and Special Agents of the Internal Revenue
Service, Criminal Investigative Division, New York Field Office, under the direction of
Special Agent in Charge Victor Lessoff. The arrest of Jones was the result of the efforts
of the Spanish National Police, Fugitive Squad.
The fact that a defendant has been charged with a crime is merely an accusation
and the defendant is presumed innocent until and unless proven guilty. http://www.justice.gov/usao/nyw/press/press_releases/TwelveCharged.pdf
TRAPPER JIM
13年前
That stinks. http://www.sec.gov/news/press/2012/2012-93.htm
SEC Charges U.S. Perpetrators in $35 Million International Boiler Room Scheme
FOR IMMEDIATE RELEASE
2012-93
Washington, D.C., May 16, 2012 — The Securities and Exchange Commission today charged a Hawaii resident and two firms he used to orchestrate a scheme in which he covertly founded small companies, installed management, and recruited overseas boiler rooms that pressured investors into buying their stock while he pocketed more than $2 million in consulting fees from proceeds of the fraudulent stock sales.
Additional Materials
SEC Complaint
The SEC alleges that Nicholas Louis Geranio worked behind the scenes to create eight U.S.-based companies used to raise money through the sale of Regulation S stock, which is exempt from SEC registration under the securities laws because it is offered solely to investors located outside the United States. Geranio handpicked the management for the companies, primarily Keith Michael Field of Sherman Oaks, Calif., who served as an officer, director, or investor relations representative for each company and also is charged in the SEC’s complaint. Geranio then set up consulting arrangements through his firms — The Good One Inc. and Kaleidoscope Real Estate Inc. — so he could instruct management on how to run the companies and raise money offshore. Geranio extracted consulting fees from the companies, which generally had few or no employees, little or no office space, and no sales or customers.
The SEC alleges that Field drafted misleading business plans, marketing materials, and website information about the companies that were provided to investors as part of fraudulent solicitation efforts by teams of telemarketers operating in boiler rooms that Geranio recruited primarily in Spain. The boiler rooms used high-pressure sales tactics and false statements about the companies to raise more than $35 million from investors. Meanwhile, Geranio instructed Field and others to buy and sell shares in some of the companies to create an illusion of trading activity and manipulate upwards the price of the publicly-traded stock.
“Geranio covertly set up companies and manipulated the market for their stock to profit from aggressive offshore boiler room activity,” said Stephen L. Cohen, Associate Director in the SEC’s Division of Enforcement. “Geranio pulled the strings while Field scripted the show for the boiler rooms to bring a payday to everyone but the investors.”
According to the SEC’s complaint filed in the U.S. District Court for the Central District of California, Geranio was the subject of a previous SEC enforcement action in 2000. In his latest misconduct, he concealed his role from investors and the public at all times by acting through The Good One and Kaleidoscope. The scheme lasted from April 2007 to September 2009. Geranio began by locating and acquiring shell companies to create the issuers used in the scheme: Blu Vu Deep Oil & Gas Exploration Inc., Green Energy Live Inc., Microresearch Corp., Mundus Group Inc., Power Nanotech Inc., Spectrum Acquisition Holdings Inc., United States Oil & Gas Corp., and Wyncrest Group Inc. Geranio then appointed management for these companies, in some cases turning to business associates, friends, or others. For example, the former CEO of Blu Vu was someone Geranio met while kite surfing in Malibu.
According to the SEC’s complaint, Geranio worked behind the scenes to keep the companies’ publicly-traded shares trading at prices conducive to the boiler room sales. He did this by directing Field, personal friends, and others to open accounts and buy or sell shares in at least five of the companies as part of matched orders and manipulative trades that created the false impression of active trading and market value in these stocks. The manipulative trades allowed the boiler rooms to sell the Regulation S shares to overseas investors at higher prices.
The SEC alleges that boiler room representatives recruited by Geranio induced investors by using aggressive techniques consistent with boiler room activity. For instance, they promised immediate and substantial investment returns, convinced investors that they needed to purchase the shares immediately or miss the grand opportunity altogether, and threatened legal action if an investor did not agree to purchase shares that the representatives believed the investor had already agreed to purchase. The boiler rooms also used “advance fee” solicitations, telling investors that only if they purchased shares in one of these companies would the boiler room agree to sell their other shares. Many of the investors were elderly and living in the United Kingdom.
According to the SEC’s complaint, investors were directed to pay for their Regulation S stock by sending money to U.S.-based escrow agents. As arranged by Geranio, the escrow agents paid 60 to 75 percent of the approximately $35 million raised from investors to the boiler rooms as their sales markups, kept 2.5 percent as their own fee, and paid the remaining proceeds back to the companies that Geranio created. The companies (or in some cases the escrow agents) then funneled approximately $2.135 million of the proceeds back to Geranio through The Good One and Kaleidoscope in the form of consulting fees, and paid Field approximately $279,000.
The SEC alleges that Geranio also assisted in diverting $240,000 in investor funds toward an undisclosed down payment on a property to start a Hawaiian wedding planning company.
The SEC’s complaint alleges that Geranio, Field, The Good One and Kaleidoscope violated Sections 17(a)(1) and (3) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rules 10b-5(a) and (c) thereunder. The complaint alleges that Field also violated Section 17(a)(2) of the Securities Act and aided and abetted the companies’ violations of Section 10(b) of the Exchange Act and Rule 10b-5(b) thereunder, and Geranio is liable as a control person of The Good One and Kaleidoscope under Exchange Act Section 20(a). The SEC is seeking financial penalties, disgorgement of ill-gotten gains plus prejudgment interest, penny stock bars, and permanent injunctions against all of the defendants, as well as officer and director bars against Geranio and Field. The complaint seeks disgorgement and prejudgment interest against relief defendant BWRE Hawaii LLC based on its alleged receipt of investor funds.
The SEC's investigation, which is continuing, has been conducted by Ricky Sachar, Carolyn Kurr, and Wendy Kong under the supervision of Josh Felker with assistance from Jim Daly in the Office of International Affairs. Richard Simpson will lead the litigation. The SEC acknowledges the assistance of the City of London Police, Macedonian Securities and Exchange Commission, Macedonian Public Prosecutor, Lithuanian Securities Commission, Australian Securities and Investments Commission, Comision Nacional del Mercado de Valores (Spain), and Financial Market Supervisory Authority (Switzerland).
# # #
More information about boiler room schemes: http://www.sec.gov/investor/pubs/coldcall.htm and http://www.sec.gov/investor/pubs/worthless.htm
SEC PAUSE list of unregistered soliciting entities that have been the subject of investor complaints: http://www.sec.gov/investor/oiepauselist.htm
http://www.sec.gov/news/press/2012/2012-93.htm
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Modified: 05/16/2012
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