Archive

July 12, 2018

Darren Goodrich, a former registered stock broker, was sentenced to two concurrent 41-month terms in prison for his role in two securities schemes.  In the first, along with his co-conspirators, Goodrich had controlled the trading of stock in Cubed, Inc., to manipulate the price and trading volume to their advantage.  In the second, Goodrich helped engineer several pump-and-dump schemes that generated almost $35 million in profits for the conspirators.  USAO EDNY

July 10, 2018

A man who had pretended to be a Navy SEAL as part of a scheme to defraud investors was sentenced to 60 months in prison and ordered to pay $1.4 million in restitution.  Edward Campbell had promised investors he would use their funds to buy historical bonds in China and to exchange currency from Papua New Guinea.  Instead, he converted the funds for personal use.  USAO SDOH

July 10, 2018

Colorado man Frank Morelli was sentenced to seven years in prison for his role in a seven-person scheme to defraud the SEC and investors.  With his co-conspirators, Morelli had manipulated the stock price of a company they controlled through false press releases, organized insider trading, and bribery.  The fraud had generated several million dollars in profits before it was stopped.  USAO EDPA

July 6, 2018

A former hedge fund manager and a former stock trader were convicted of, among other charges, conspiracy to commit securities fraud in connection with a scheme that generated $30 million in ill-gotten profits.  The defendants conspired with cybercriminals to obtain press releases prior to their release and then execute trades designed to profit off their advance knowledge of the financial information contained in the announcements.  DOJ, DHS, the Secret Service, and the SEC worked together on the investigation and prosecution.  USAO EDNY

July 3, 2018

A New York attorney was sentenced to seven years in prison for defrauding investors in a Ponzi-style scheme he created.  He was also required to pay just over $2 million in restitution to his investors.  Like the namesake scheme, this one relied on using new investors to pay out the supposed returns of the initial investors.  USAO WDNY

July 11, 2018

The SEC filed fraud charges against a second defendant in connection with a scheme to manipulate the price of Fitbit securities through false regulatory filings. According to the SEC's complaint, Mark E. Burns purchased Fitbit call options just minutes before he and his co-conspirator, Robert W. Murray, filed a fake tender offer on the SEC's EDGAR system purporting to acquire Fitbit's shares at a substantial premium. The SEC charged Murray last year and he recently was sentenced to prison in a parallel criminal case. The false tender offer was made in the name of ABM Capital LTD – a nonexistent company for which the defendants created an EDGAR account. Fitbit's stock price temporarily spiked when the tender offer became publicly available on Nov. 10, 2016, and Burns sold all of his options for a 350 percent profit of approximately $13,000. SEC

July 3, 2018

Illinois announced a $20 million settlement with Royal Bank of Scotland as a result of the bank’s misconduct in its marketing and sale of risky residential mortgage-backed securities (RMBS) leading up to the 2008 economic collapse. The settlement with Royal Bank of Scotland resolves an investigation by Madigan’s office over the bank’s failure to disclose the true risk of RMBS investments. IL

June 28, 2018

Edward J. DiMaria pled guilty to multiple counts of corporate fraud related an accounting and securities fraud scheme that caused over $25 million in shareholder losses. DiMaria was the former CFO of Bankrate Inc. a financial services company that was formally headquartered in North Palm Beach, Florida. DiMaria inflated the company’s earnings that misled shareholders, auditors, and the SEC. DiMaria is required to pay $21 million in restitution to Bankrate shareholders. DOJ

June 27, 2018

Financial advisor Darayl Davis was indicted for allegedly telling clients they were guaranteed to make money and then defrauding them out of $4.7 million. Davis allegedly took money from clients and then spent it for his own personal benefit including $706,000 in credit card payments, $476,500 to rent a mansion in Los Angeles, $102,000 on airfare, $42,000 on luxury hotels and other similar types of expenses. USAO NDIL

June 25, 2018

Investment Fund operator Richard Wyatt Davis, Jr. was sentenced to 90 months in prison for defrauding investors of approximately $9.3 million. Davis, Jr. induced victim to invest in funds he controlled and then used those funds to pay expenses, repay other investors, and to pay himself. Davis, Jr. made a series of false representations to the victims to induce them to invest. For example, Davis, Jr. told investors he would invest in real estate, gold mines, and water production when in reality he did not intend to invest victim money in any of those ventures. USAO WDNC