Posting ot your alter ego eh Isaac? "CNLG NEWS
2001-05-23 - Lam and Fisher - Securities Fraud Charges - News Release
Two New Jersey Cases Included in Internet Crackdown "Operation Cyber Loss"
NEWARK - Two New Jersey stock manipulation cases are among approximately 90 individuals and companies charged in a
nationwide anti-cyber crime operation announced today by the FBI and Attorney General John Ashcroft.
David L. Fisher, also known by his Internet name "Daytrade27," pleaded guilty May 17 to a one-count Information, charging him
with conspiring with five others to manipulate the price of penny stocks, according to U.S. Attorney Robert J. Cleary.
Fisher, 29, of Oceanside, N.Y., an unemployed stockbroker, pleaded guilty before U.S. District Judge Faith S. Hochberg,
according to Assistant U.S. Attorney James F. McMahon. Fisher's sentencing is scheduled for Sept. 6. He faces a maximum
sentence of five years in federal prison and a $250,000 fine. Fisher is free on $10,000 bail set by Judge Hochberg.
Ika Lam was indicted May 16, on one count of securities fraud in connection with a scheme to use multiple Internet accounts
with Datek Online. The scheme involved the manipulation of the stock price of Conolog Corp., an engineering and design
company in Somerville, N.J., as well as the stock of other companies, according to Assistant U.S. Attorney John J. Carney.
Lam, 28, of Los Angeles, is currently a fugitive. Lam allegedly used multiple aliases to open numerous accounts with bad
checks and was able to amass $200,000 from the manipulation of the stocks before the scheme was uncovered.
Lam was indicted on one count of securities fraud and faces a maximum penalty of 10 years in prison and a $1 million fine if
convicted.
The two cases are part of a nationwide series of investigations of Internet-related frauds. The effort, code named "Operation
Cyber Loss," was coordinated by the FBI and Department of Justice in Washington. (Please see accompanying FBI/DOJ news
release. Charging documents on the New Jersey cases are available upon request from the NJUSAO press office.)
Subjects of the investigations are facing a variety of federal and state criminal charges, including wire fraud, mail fraud, bank
fraud, money laundering, and intellectual property right violations. The fraud schemes had some 56,000 victims who suffered
cumulative losses in excess of $117 million.
In Fisher's case, he admitted that he manipulated the prices of stocks, in what is commonly known as a "pump-and-dump"
scheme, by hyping them on the ZOOMTrades.com web site, which he owned and operated with one of his co-conspirators.
Coincidentally, among the stocks Fisher manipulated was Conolog, which Lam allegedly also manipulated.
Fisher admitted that he and an unindicted co-conspirator identified in the Information as John Doe began posting stock profiles
recommending that investors purchase the stocks on the ZOOMTrades site on March 25, 1999. Fisher admitted that he and
John Doe chose the stocks they recommended based on the stocks' relatively low trading volumes and low prices, which made
manipulation of the stocks' prices easier.
Fisher admitted that he and John Doe made 10 such stock recommendations between March 25, 1999 and May 27, 1999.
According to the Information, the daily trading volume for the profiled stocks increased anywhere from 992 per cent to 4678 per
cent over the average daily trading volume for the previous year on the days the recommendations were posted. On the days
the profiles were posted, the closing prices of eight of the 10 profiled stocks increased an average of 18.5 percent, with the
greatest increase in closing price being approximately 55 percent.
In Lam's case, the Indictment alleges that Lam opened alias accounts with Datek with bad checks and, before the accounts
could be closed for insufficient funds, engaged in a series of trades between the alias accounts and other accounts controlled
by the defendant. During the trading activity, the selected alias accounts would consistently lose money to other accounts by
selling a thinly traded security at a price slightly lower than its acquisition price. By engaging in these types of trades, the
defendant was able to manipulate the price of the traded security, and thereby fraudulently transfer the value of the alias
accounts to the other accounts.
According to the Indictment, Lam operated out of his personal residence in Los Angeles used the Internet to access Datek's
New Jersey based computer system. Among the stocks manipulated by Lam were shares of Conolog. The Conolog shares
were traded on the NASDAQ automated trading system under the symbol CNLGW. The Indictment alleges that Lam was able
to amass more than $200,000 through the scheme.
In the Lam case, U.S. Attorney Robert J. Cleary credited Special Agents of the FBI in Newark, under the direction of Special
Agent in Charge Kevin Donovan, for their successful investigation.
In the Fisher case, Cleary credited the U.S. Postel Inspection Service in Newark, under the direction of Postal Inspector in
Charge Kevin Burke. |
