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