New guilty plea in $250 mln penny stock 'pump-and-dump' scheme
23/05/2016 22:42
By Jonathan Stempel
NEW YORK, May 23 (Reuters) - A 71-year-old man who helped
run a complicated offshore scheme to manipulate prices of more
than 40 U.S. stocks and launder more than $250 million of profit
pleaded guilty on Monday to a money laundering conspiracy
charge, federal prosecutors said.
Robert Bandfield admitted to involvement in what prosecutors
called a large "pump-and-dump" scheme that in 2014 briefly
caused the market value of Cynk Technology Corp CYNK.PK , a
development stage company with no revenue or assets, to rocket
past $6 billion.
Gregg Mulholland, a U.S.-Canadian penny stock promoter who
prosecutors said also helped run the scheme, pleaded guilty on
May 9 to a money laundering conspiracy charge. urn:newsml:reuters.com:*:nL2N1860J8
Bandfield, a U.S. citizen who had been living in Belize
City, Belize, entered his plea before U.S. District Judge I. Leo
Glasser in Brooklyn, New York.
The defendant faces up to 20 years in prison at his Sept. 1
sentencing. He will also forfeit $1 million and give up stakes
in three Belize companies sharing the IPC name.
Bandfield has been in federal custody since his September
2014 arrest, and had been scheduled to go to trial on May 31.
"This is a sad day for Mr. Bandfield and those who care
about him," his lawyer Eugene Ingoglia said in an interview. "We
look forward to making our arguments for a fair sentence."
Prosecutors said Bandfield helped set up a network of shell
companies in Belize and the West Indies to let Mulholland, who
was known as "Stamps" and "Charlie Wolf," and other accomplices
manipulate the prices of penny stocks.
They also said Bandfield's activity enabled his corrupt
clients to evade taxes and disclosures required by the U.S.
Internal Revenue Service, and launder illegal proceeds with
unverifiable debit cards and attorney escrow accounts.
The scheme allegedly ran from January 2009 to September
2014, prosecutors said.
The case is U.S. v. Bandfield, U.S. District Court, Eastern
District of New York, No. 14-cr-00476.
(Reporting by Jonathan Stempel in New York; Editing by Phil
Berlowitz)
((jon.stempel@thomsonreuters.com; +1 646 223 6317; Reuters
Messaging: jon.stempel.thomsonreuters.com@reuters.net))
Keywords: STOCKS MONEYLAUNDERING/