Two men get U.S. prison terms for $250 million stock fraud scheme
06/02/2017 22:42
By Nate Raymond
NEW YORK, Feb 6 (Reuters) - Two men were sentenced to
lengthy U.S. prison terms on Monday for conspiring to launder
$250 million earned by manipulating shares of over 40 companies,
including little-known Cynk Technology Corp CYNK.PK , whose
value soared past $6 billion.
Gregg Mulholland, a dual U.S.-Canadian citizen who
prosecutors said orchestrated a series of pump-and-dump stock
fraud schemes, was sentenced by U.S. District Judge Leo Glasser
in Brooklyn to 12 years in prison.
Glasser imposed a six-year prison sentence on Robert
Bandfield, a U.S. citizen living in Belize who prosecutors said
oversaw an offshore operation that facilitated numerous fraud
schemes through the creation of thousands of shell companies.
In court, Mulholland, who has been in custody since being
arrested in June 2015 during a layover in Phoenix on a flight
from Canada to Mexico, urged the judge to be lenient so that he
could see his daughters and wife in Canada again.
"I'm sorry comes nowhere close to saying how truly sorry I
have," said Mulholland, who like Bandfield pleaded guilty in May
to conspiring to commit money laundering.
But Glasser said Mulholland, 47, should have known the
consequences of his actions, having engaged in the fraud soon
after resolving an earlier U.S. Securities and Exchange
Commission lawsuit accusing him of similar conduct.
"Not only was this a crime, this offense, one that persisted
over a number of years, but you were a recidivist, user were a
securities fraudster before you got involved here," Glassers
said.
U.S. regulators in July 2014 suspended trading in Cynk, a
social media company with no revenue or assets, after its share
price soared in less than a month to $21.95 from 6 cents for no
apparent reason.
Prosecutors said Cynk was among about 40 companies whose
shares were manipulated by individuals overseen by Mulholland, a
dual U.S.-Canadian citizen, resulting in $250 million in
proceeds that were laundered through offshore law firms.
Prosecutors said Mulholland and his group of stock
manipulators conducted the scheme through shell structures and
offshore brokerage firms established by Bandfield, a former
dentist who founded Belize-based IPC Corporate Services.
Prosecutors said through IPC, Bandfield, 72, marketed a host
of offshore services to more than 100 clients including
Mulholland, who used the more than 5,000 sham companies he
incorporated to facilitate securities and tax frauds.
The brokerage firms he established included Panana-based
Legacy Global Markets SA, which Mulholland bought and secretly
owned in 2012, prosecutors said. urn:newsml:reuters.com:*:nL1N1E81GV
The case is U.S. v. Bandfield et al, U.S. District Court,
Eastern District of New York, No. 14-00476.
(Reporting by Nate Raymond in New York)
((Nate.Raymond@thomsonreuters.com and Twitter @nateraymond;
646-223-6752; Reuters Messaging:
nate.raymond.thomsonreuters.com@reuters.net))
Keywords: STOCKS MONEYLAUNDERING/CYNK TECHNOLOGY