U.S. charges 14 over $147 mln New York boiler room scam

CES Synergies

12/07/2017 22:07

By Jonathan Stempel 
    NEW YORK, July 12 (Reuters) - Federal prosecutors on 
Wednesday criminally charged 14 defendants with involvement in a 
$147 million stock manipulation scheme orchestrated in a Long 
Island, New York boiler room, and which swindled dozens of 
senior citizens and other investors. 
    Employees of My Street Research, based in Melville, New 
York, obtained shares at below-market prices from insiders of 
five public companies, and conducted wash trades and other 
manipulative trading to drive prices up, according to court 
papers and acting U.S. Attorney Bridget Rohde in the Eastern 
District of New York. 
    Victims were repeatedly pressured in cold calls and emails 
to buy shares and sign up for stock tips, and five defendants 
tried to launder $14.7 million of proceeds from the scheme, 
which ran from January 2014 to this month, prosecutors said. 
    One such email, for the company Grilled Cheese Truck Inc 
 GRLD.PK , said "URGENT!!! MUST WATCH THIS LINK REGARDING THE 
'GRILLED CHEESE TRUCK'" and provided a link to a Fox Business 
Channel video titled "Soup Nazi Hits the Road with New Food 
Trucks," according to the nine-count indictment alleging 
securities fraud and various conspiracies. 
    In a related civil case against many of the same defendants, 
the U.S. Securities and Exchange Commission said one defendant 
told a victim unhappy about his losses: "I am tired of hearing 
from you. Do you have any rope at home? If so tie a knot and 
hang yourself or get a gun and blow your head off."   
    Prosecutors said the defendants Erik Matz, 44, of Mt. Sinai, 
New York, and Ronald Hardy, 42, of Port Jefferson, New York, 
managed the alleged boiler room My Street Research, which was 
previously called Dacona Financial, Power Traders Press and 
Trade Masters Co. 
    Other defendants include cold callers, people involved with 
stock research, and insiders or marketers affiliated with 
Grilled Cheese Truck, CES Synergies Inc  CESX.PK , Hydrocarb 
Energy Corp, Intelligent Content Enterprises Inc and National 
Waste Management Holdings Inc  NWMH.PK , prosecutors said. 
    Not all defendants were charged on each count. Efforts to 
obtain comment from a lawyer for Matz and Hardy were not 
immediately successful. 
    All defendants were expected to appear in federal 
courthouses in Brooklyn, California or Florida on Wednesday, 
prosecutors said. 
 
 (Reporting by Jonathan Stempel in New York; Editing by Lisa 
Shumaker) 
 ((jon.stempel@thomsonreuters.com; +1 646 223 6317; Reuters 
Messaging: jon.stempel.thomsonreuters.com@reuters.net)) 
 
Keywords: USA CRIME/BOILERROOM