California Attorney Pleads Guilty in National Securities Fraud
A California attorney pleads guilty to a securities conspiracy charge in a pump-and-dump stock scam.
By Samantha Joseph | January 26, 2018 at 05:59 PM
U.S. Securities and Exchange Commission building.
Diego M. Radzinschi
California attorney Andrew H. Wilson pleaded guilty of conspiracy to unlawfully sell unregistered securities.
The Nevada City man was one of 10 people convicted in a conspiracy to sell shares of shell companies they secretly controlled, then inflating values in a pump-and-dump scam that involved participants from New York and Colorado.
Wilson pleaded guilty Thursday in federal court in Miami. He faces a maximum statutory sentence of five years in prison and a fine of up to $250,000 or double the proceeds of the offense, according to prosecutors. He is at least the second attorney charged in the scam.
Prosecutors say the scheme ran for about seven years and involved fraudulent U.S. Securities and Exchange Commission filings listing nominee chief executive officers for shell companies.
Participants presented the CEO as the owner and listed shareholders while maintaining full control over blocks of shares. When the shares become unrestricted, or free trading, participants secretly sold them to shell buyers or got SEC approval to sell them publicly.
Wilson created fraudulent paperwork to support the scam, according to court documents.
In October, attorney James M. Schneider of Hillsboro Beach faced a parallel civil enforcement action by the SEC, accusing him and Wilson of participating in a fraud involving 22 blank-check companies “secretly bound for reverse mergers.” Blank-check companies “have no operations, making them attractive targets for those seeking reverse mergers for use in pump-and-dump schemes,” according to prosecutors.
New York stock promoter Yelena Furman and Colorado registered stock transfer agent John Ahearn are among those convicted, according to a news release from the Department of Justice.
Sentencing for Ahearn and Wilson is set for June 8 before U.S. District Judge Kathleen M. Williams in Miami. Furman’s sentencing is set for April 25 before U.S. District Judge Cecilia M. Altonaga.