U.S. charges nine with $131 mln ForceField Energy fraud (updated)

ForceField Energy

03/05/2016 19:29

(Adds details of charges, defendants' names, SEC charges, 
byline) 
    By Jonathan Stempel 
    NEW YORK, May 3 (Reuters) - U.S. prosecutors on Tuesday 
charged nine people with defrauding investors into buying the 
now essentially worthless stock of LED lighting provider 
ForceField Energy Inc  FNRG.PK , causing $131 million of losses. 
    The charges against the defendants, who include stock 
promoters, brokers and investor relations officials, were 
announced by U.S. Attorney Robert Capers in Brooklyn. 
    They follow the April 2015 arrest of Richard St. Julien, a 
Canadian citizen who was ForceField's executive chairman, on 
charges he orchestrated schemes to inflate the stock price of 
his company, which was once called SunSi Energies Inc. 
    The U.S. Securities and Exchange Commission on Tuesday 
announced related civil charges against all 10 defendants, 
including St. Julien. 
    Authorities said the defendants manipulated ForceField's 
stock from December 2009 to April 2015 by secretly trading it in 
undisclosed accounts, inflating trading volume to create a false 
sense of demand, and concealing kickbacks to stock promoters and 
brokers to tout it. 
    One defendant, Herschel Knippa, 45, was accused of promoting 
the stock on Fox Business Network's "Varney & Co" in July 2014 
without revealing he was receiving kickbacks, and lying to host 
Stuart Varney when asked if he owned ForceField by responding: 
"You bet I do. I put my money where my mouth is." 
    The defendants "took a company with essentially no business 
operations and little revenue and deceived the market and their 
clients into believing it was worth hundreds of millions of 
dollars through a dizzying round of unauthorized trades and 
deceptive promotions," Capers said in a statement. "The deceived 
investors were left holding the empty bag." 
    ForceField shares last traded on Thursday, at 2 cents. 
    Among the other new defendants are Jared Mitchell, 34, of 
New York, the managing partner of Mitchell & Sullivan Capital 
LLC; and Christopher Castaldo, 44, of Glen Head, New York, the 
president of Wall Street Buy Sell Hold Inc. 
    Their lawyers and a lawyer for Knippa were not immediately 
available for comment. A lawyer for St. Julien, 46, did not 
immediately respond to requests for comment. 
    Prosecutors said Tuesday's five-count indictment charges the 
nine new defendants with securities fraud, and conspiracies to 
commit securities fraud, wire fraud and money laundering. 
Mitchell was also charged with making a false statement.     
 
 (Reporting by Jonathan Stempel in New York; Editing by Richard 
Chang) 
 ((jon.stempel@thomsonreuters.com; +1 646 223 6317; Reuters 
Messaging: jon.stempel.thomsonreuters.com@reuters.net)) 
 
Keywords: FORCEFIELD CHARGES/