4 Charged in Internet Stock Scheme
HAUPPAUGE, N.Y. (AP) _ Four men were arrested by federal
authorities Wednesday on charges they used Internet Web sites and
e-mail newsletters to try to drive up the stock values of eight
companies through misleading information.
The four were charged in a two-count indictment in U.S. District
Court in Hauppauge with conspiracy to commit securities fraud and
conspiracy to commit money laundering.
U.S. Attorney Loretta E. Lynch said the case was striking
because it demonstrated how traditional boiler room securities
fraud schemes had moved to cyberspace.
The defendants were accused of reaching hundreds of thousands of
potential investors through the Internet.
''The defendants were able to manipulate stock supply and prices
without hiring large staffs of brokers, traders and cold callers to
do their bidding,'' she said in a statement.
''This perverse abuse of the immense communicative power of the
Internet should act as a warning to all investors to be wary when
relying on the accuracy of Internet investment recommendations,''
she added.
FBI Assistant Director Lewis Schiliro said the case should serve
as a warning to the public.
''Caution should be the password used by all before logging on
to cyberspace commerce,'' he said.
Three of those who were arrested and charged had been barred
from the securities industry before.
The indictment said the defendants promoted the eight companies
through a Web site known as ''stockplayer.com'' and through a
related Internet investment newsletter known as ''Stockplayer.''
The defendants allegedly misstated the financial results and
business prospects of the companies it profiled.
Prosecutors identified the four as Vincent Napolitano, 38, of
Oyster Bay; Irving Stitsky, 45, of Brookville; Jordan Shamah, 41,
of Westbury; and Robert Kessler, 40, of Syosset.
If convicted, the four could face prison terms of up to 20 years
on the most serious charge, along with millions of dollars in fines
or restitution.
|
