Tag: ASD

BULLETIN: Songkram Roy Shachaisere, a sidebar figure in the AdSurfDaily Ponzi scheme story, has been indicted with several others in what federal prosecutors in the Eastern District of New York are calling “one of the largest international penny stock frauds in history.”

The probe “used wiretaps in the United States and undercover agents in foreign countries,” prosecutors said.

Chillingly, prosecutors said some of the scammers impersonated IRS employees. Others joined forces to scam victims a second time by creating a “fake law firm.” Some of the money allegedly ended up in “an account maintained in Beirut, Lebanon.”

Indeed, prosecutors said, some of the scammers branched off from the penny-story scheme to orchestrate a scheme “in which they fraudulently induced penny stock victims to pay advance fees, on the promise that the victims would then either be able to sell their securities to other waiting investors or join lawsuits to reclaim their losses,” the office of U.S. Attorney Loretta E. Lynch said.  “In reality, the advance fees were nothing more than a con, as neither the investors nor the lawsuits existed.  To hoodwink the penny stock owners, the advance fee defendants invented fake trading companies and a fake law firm and then posed as employees of those entities while soliciting advance fees from the penny stock victims.”

“The criminals behind this scheme were shameless in heartlessly defrauding hundreds of victims out of their savings and retirement accounts for their own enrichment,” said James C. Spero, special agent in charge of Immigration and Customs Enforcement Homeland Security Investigations (HSI) in Buffalo.

All in all, the scams netted at least $140 million and defrauded victims in 35 countries, prosecutors said.

Fake news releases, bogus announcements about nonexistent ventures, bribes and fake posts on social-media sites were used to dupe the masses, prosecutors said.

Shachaisere allegedly was involved in a massive pump-and-dump scheme. In 2010, according to the SEC, Sahachaisere fraudulently touted the stock of Praebius Communications. That’s the company ASD once conveniently announced was providing it a $200 million revenue infusion. ASD made the claim while awaiting a key ruling by the federal judge presiding over the ASD Ponzi case brought by the U.S. Secret Service in 2008.

Even as critics were voicing concerns that ASD was advancing yet-another story that was too good to be true, members of the now-defunct Pro-ASD Surf’s Up forum were cheerleading ASD’s purported revenue infusion from Praebius.

Some ASD members sprinted to forums to announce the news, but the information could not be verified. ASD later removed the announcement from its website.

ASD’s name was not referenced in the SEC’s 2010 complaint against Shachaisere, and Praebius was not listed as a defendant in the case. Praebius was referenced in the case as a client that paid Sahachaisere and his company in stock “to provide investor relations services.”

All in all, seven defendants were arrested today, with nine indicted. Before the bust, one of the defendants bragged, “We know enough to be subtle,” prosecutors said.

Here is a list of the defendants:

• Sandy Winick
  Citizenship: Canada
  Age: 55
  Bangkok, Thailand
• Gregory Curry
  Citizenship: Canada
  Age: 63
  Bangkok, Thailand
• Kolt Curry
  Citizenship: Canada
  Age: 38
  Ontario, Canada
• Gregory Ellis
  Citizenship: Canada
  Age: 46
  Ontario, Canada
• Gary Kershner
  Citizenship: United States
  Age: 72
  Tucson, Arizona
• Joseph Manfredonia
  Citizenship: United States
  Age: 45
  Tom’s River, New Jersey
• Cort Poyner
  Citizenship: United States
  Age: 44
  Boca Raton, Florida
• Songkram Roy Shachaiser
  Citizenship: United States
  Age: 43
  Huntington Beach, California
• William Seals
  Citizenship: United States
  Age: 51
  Fallbrook, California

Here’s how prosecutors described the pump-and-dump scheme (italics added):

As alleged in the indictment, defendants Sandy Winick, Gary Kershner, Joseph Manfredonia, Cort Poyner, Songkram Roy Shachaisere and William Seals orchestrated one of the largest international penny stock frauds in history. First, the defendants gained controlling interests of huge quantities of worthless stock in 11 public companies known in the industry as ‘file cabinet businesses’ – thinly traded companies with minimal assets and non-existent business operations, which in many cases were mere shell companies. They then ‘pumped up’ the share prices of the companies’ stock by engaging in fraudulent and illegal sales campaigns, which included distributing false press releases, announcing non-existent business ventures and fake mergers, posting false information on social media sites and bribing stock promoters and brokers.

And here’s how prosecutors described the advance-fee component of the scam (italics/bolding added):

As the indictment alleges, defendants Winick, Gregory Curry, Kolt Curry and Gregory Ellis perpetrated a second scheme in which they fraudulently induced penny stock victims to pay advance fees, on the promise that the victims would then either be able to sell their securities to other waiting investors or join lawsuits to reclaim their losses. In reality, the advance fees were nothing more than a con, as neither the investors nor the lawsuits existed. To hoodwink the penny stock owners, the advance fee defendants invented fake trading companies and a fake law firm and then posed as employees of those entities while soliciting advance fees from the penny stock victims.

To facilitate the scheme, the defendants established boiler rooms or call centers from which members of the conspiracy would solicit advance fees from the unsuspecting penny stock victims. The call centers were located in various locales around the world, including Canada, Thailand and the United Kingdom. Recently, the defendants began planning to open a new call center in Brooklyn, New York. Some of the victims were told that they either needed to pay the advance fee to remove restrictions that were placed upon their penny stock, which prevented the victims from selling their stock in the market, or to join investors in a pending or anticipated lawsuit to recover losses that they incurred while owning the penny stock. Victims were then told that the advance fees were needed to convert the warrants of their stocks to a saleable security. In several instances, the advance fee defendants even pretended to be IRS employees collecting a bogus advance tax from victim investors before they could unload their penny stocks. The victims were directed to send payment of the advance fees to banks around the world, including bank accounts in New York City. The fraud proceeds were then transferred through a funds transfer network, located in Getzville, New York, to an account maintained in Beirut, Lebanon. Ultimately, these defendants generated more than $20 million in fraudulently obtained advance fees.

Defendant Kolt Curry described the Advance Fee Scheme in the following way over an intercepted wire communication: “I would say that 100 percent of these stocks are like uh pink uh… just dumps . . . . so … ya know they’re totally, they’re like, so a lot of these guys are dying . . . . to get rid of this crap. . . . The money is good, it’s easy. It’s easy money. Definitely easy money, and it’s good money.” In fact, while bragging about his prowess as a fraudster, defendant Kolt Curry further stated, “I had a guy send me a million dollars over one phone call . . . . He actually sent me almost two million dollars over the period of the hit . . . . I guess in the industry they coin it as a smash and grab.” As for the group’s recent plans to open a call center in Brooklyn, New York, defendant Kolt Curry said, “I tell you what man . . . hitting the Americans would be like taking money from a baby.”

Lynch’s office thanked various U.S. agencies for their worked on the probe. She also thanked the Royal Canadian Mounted Police, Financial Crime Intelligence Unit in Vancouver and the Integrated Market Enforcement Team in Toronto, and the Serious Organized Crime Agency in the United Kingdom. Meanwhile, prosecutors said that significant assistance was also provided by the United States Embassies in Ottawa, Toronto, London, Bangkok and Beijing.