PatrickPretty.com

Day: December 1, 2011

  • URGENT >> BULLETIN >> MOVING: FBI Undercover Operation Leads To Charges Against 13 Individuals In Alleged Penny-Stock Caper; SEC Halts Trading In 7 Companies

    URGENT >> BULLETIN >> MOVING: Thirteen individuals, including lawyers, corporate officers and a stock promoter, have been charged criminally in an FBI sting aimed at microcap fraud. The SEC has suspended trading in seven companies: 1st Global Financial Inc. (FGFB), based in Las Vegas; Augrid Global Holdings Corp. (AGHD), based in Houston; ComCam International Inc. (CMCJ), based in West Chester, Pa.; MicroHoldings US Inc. (MCHU), based in Vancouver, Wash; Outfront Companies (OTFT), based in Florida; Symbollon Corp./Symbollon Pharmaceuticals Inc. (SYMBA), based in Medfield, Mass; and ZipGlobal Holdings Inc. (ZIPG), based in Hingham, Mass.

    Investigators alleged the fraud involved illegal kickbacks and sham consulting agreements in schemes to hype penny stocks. The criminal activity occurred “in the midst of an undercover FBI operation,” the SEC said.

    Charged criminally, according to the SEC, were:

    • Kelly Black-White, 51, of Mesa, Ariz. Black-White operates Premier Funding Inc. and Premiere Services Inc.. He is charged with wire fraud.
    • James Prange, 60, of Greenbush, Wisc. He is affiliated with Northern Equity Inc., and is charged with wire fraud.
    • Michael Lee, 51, of Hingham, Mass. Lee is ZipGlobal’s CEO. He is charged with mail fraud and conspiracy to commit securities fraud.
    • Edward Henderson, 69, of Lincoln, R.I. He is charged with wire fraud.
    • Paul DesJourdy, 50, of Medfield, Mass. DesJourdy is the CEO of Symbollon Pharmaceuticals. He is charged with mail fraud and conspiracy to commit securities fraud.
    • James Wheeler, 51, of Camas, Wash. Wheeler is CEO of MicroHoldings Inc. He is charged with mail fraud and conspiracy to commit securities fraud.
    • Steve Berman, 49, of Hillsboro, Ohio. He is CEO of China Wi-Max Communications, and is charged with mail and wire fraud.
    • Richard Kranitz, 68, of Grafton, Wisc. He is a board member of China Wi-Max Communications, and is charged with mail and wire fraud.
    • JC Jordan, 60, of Cameron Park, Calif. Jordan is CEO of Vida Life International LTD. He is charged with mail and wire fraud.
    • Karen Person, 61, of Naperville, Ill. She is president of Small Business Company Inc., and is charged with mail and wire fraud.
    • Albert Reda, 65, of Tustin, Calif. He is treasurer of 1st Global Financial, and is charged with mail and wire fraud.
    • Steve Stuart, 48, of Monrovia, Md. Stuart is a major shareholder in ComCam International Inc., and is charged with mail and wire fraud.
    • Muhammad “MJ”  Shaheed, 44, of Houston. He is CEO of Augrid Global Holdings Corp., and is charged with mail and wire fraud.

    The office of U.S. Attorney Carmen Ortiz of the District of Massachusetts is handing the criminal cases, the SEC said.

    “Kickbacks and phony consulting agreements have no place in the financial strategies of any public company, and executives who engage in this kind of fraud are just selling out their own investors,” said David Bergers, director of the SEC’s Boston Regional Office.

    The undercover operation, according to the SEC, was under way for a year, and Desjourdy, Henderson, Lee and Wheeler also were charged civilly.

  • PONZI/FRAUD BRIEFS: Georgia HYIP Pair Sentenced To Combined 27 Years; Florida Fraudster Whose Wife Awaits Sentencing Gets 10 Years; Australian Court Rules TVI Express A Pyramid Scheme

    EDITOR’S NOTE: This information is presented in the form of briefs.

    Georgia HYIP/Ponzi pair sentenced: Geoffrey A. Gish, 57, of Lawrenceville, was sentenced to 20 years in federal prison for his role in a $29 million “high-yield” scam that fleeced investors of more than $17 million.

    Myra J. Ettenborough, implicated in the same scam initially unmasked by the SEC, was sentenced to seven years. Like Gish, Ettenborough, 56, of Roswell, was ordered by U.S. District Judge Charles A. Pannell Jr. to pay more than $17.245 million in restitution.

    The scam involved pooled funds that “supposedly involved ‘high yield trading programs,’” prosecutors said.

    An FBI agent said the scammers were greedsters.

    “Mr. Gish and Ms. Ettenborough exhibited total disregard for their victim investors while displaying an almost limitless level of personal greed,” said Brian D. Lamkin, special agent in charge of the FBI’s Atlanta Field Office.

    Florida HYIP/Ponzi globetrotter sentenced: John S. Morgan, the Sarasota man whose high-yield Ponzi venture took him to Europe and later landed him in jail in Sri Lanka, has been sentenced by U.S. District Judge Susan Bucklew to 10 years and a month in federal prison in the United States.

    Morgan, 52, who ultimately cooperated with the government, may end up serving less time than his wife, who took her chances with a jury and was convicted in September on all 22 counts filed against her.

    Marian Morgan, 57, is scheduled to be sentenced Dec. 20.

    Her jet-setting days at an end, Marian Morgan complained from Sri Lanka to a U.S. judge about “filthy” conditions in the overseas jail, noting she was being housed alongside “murderers and heroin dealers,” according to court records.

    The Morgans were returned to the United States in 2009.

    TVI Express ruled a pyramid scheme in Australia: TVI Express, an MLM company whose pitchmen used images of Donald Trump and Warren Buffett in promos, has been ruled a pyramid scheme by the Federal Court of Australia.

    The case was brought by the Australian Competition and Consumer Commission (ACCC).

    “It is beyond question that new participants in the TVI Express System are [led] to believe that they will receive payments for the introduction of further new participants,” Justice Nicholas said, according to ACCC.

    “Indeed, the only way a participant can earn any income in the TVI Express System is through the introduction of new members to the scheme,” Justice Nicholas said, according to ACCC.

    Some MLM scammers routinely use images of Trump and Buffett in promos. Affiliates of Data Network Affiliates (DNA), a firm associated with huckster Phil Piccolo, published images Trump and Oprah Winfrey in their promos last year.

    When flogging DNA during a conference call last year that featured Piccolo associate Joe Reid, a fellow DNA huckster claimed the company had “certain people on speed dial that’s incredible.”

    Reid emerged last month as a pitchman for Text Cash Network (TCN), which came out of the gate trading on the names of Groupon and Google Offers, among others. A firm known as One World One Website (OWOW) was an early promoter of TCN.

    Reid and Piccolo also flogged OWOW last year.