'Wolf' suspect behind $300 million Cynk fraud pleads not guilty
10/08/2015 19:49
By Nate Raymond
NEW YORK, Aug 10 (Reuters) - A man accused by U.S.
prosecutors of running a $300 million penny-stock manipulation
fraud that drove the market value of little-known Cynk
Technology Corp CYNK.PK past $6 billion pleaded not guilty on
Monday.
Gregg Mulholland, also known as "Stamps" and "Charlie Wolf,"
was arraigned on charges including securities fraud in an
indictment recently filed in federal court in Brooklyn, New
York, following the dual U.S.-Canadian citizen's arrest in June.
ID:nL1N0Z92FI
Mulholland, 46, was detained during a layover in Phoenix on
a flight from Canada to Mexico. He is one of three new
defendants added in the July 31 indictment to a pre-existing
case brought in September against six other people.
Those prior six defendants included Robert Bandfield, a U.S.
citizen who authorities say operated a business in Belize that
helped clients carry out stock manipulation schemes.
The latest indictment added as defendants Philip Kueber, a
Canadian citizen who prosecutors say was Mulholland's associate,
and Paula Psyllakis, a Canadian citizen believed to manage the
back offices of an offshore brokerage firm.
Only Mulholland and Bandfield, 70, are in U.S. custody.
Bandfield, who the latest indictment accused of participating in
the Cynk securities fraud, appeared at Monday's hearing and also
pleaded not guilty.
Lawyers for Mulholland and Bandfield declined comment after
the hearing. Attorneys for Kueber and Psyllakis could not be
identified.
U.S. regulators in July 2014 suspended trading in Cynk, a
social media company with no revenue or assets, after its share
price soared without explanation to $21.95 from 6 cents in less
than a month.
That surge, which followed a month when no Cynk shares were
traded at all, briefly gave the company a market value higher
than three dozen members of the Standard & Poor's 500.
Prosecutors said that Mulholland was behind that volatility
after amassing tens of millions of Cynk shares to conduct what
is known as a pump-and-dump scheme.
The indictment said Cynk was among about 40 public companies
whose shares were manipulated by individuals overseen by
Mulholland, resulting in $300 million in proceeds that were
laundered through at least five offshore law firms.
Prosecutors say Mulholland also secretly owned Legacy Global
Markets SA, a broker-dealer based in Panama and Belize that was
part of a scheme to launder about $500 million in fraudulent
proceeds for over 100 U.S. citizens and residents.
The case is U.S. v. Bandfield, U.S. District Court, Eastern
District of New York, No. 14-00476.
(Reporting by Nate Raymond in New York; Editing by Bill Rigby)
((Nate.Raymond@thomsonreuters.com and Twitter @nateraymond;
646-223-6752; Reuters Messaging:
nate.raymond.thomsonreuters.com@reuters.net))
Keywords: USA FRAUD/CYNK TECHNOLOGY