Surgilight's ex-chief executive indicted
A federal grand jury indicted the former chief executive of Orlando-based Surgilight Inc. Thursday on securities fraud and money-laundering charges stemming from an alleged pump-and-dump stock scheme that cost investors millions.
The indictment in New York accuses Jui-Teng Lin, 54, of issuing false and misleading news releases in 1999 and early 2000 to promote a new optical laser system that promised to reverse the effects of presbyopia, a vision problem that affects nearly everyone older than 45. The condition is typically treated with reading glasses.
The allegedly false releases contained claims that the company had developed infrared lasers capable of correcting presbyopia, and that the equipment was being tested at major medical centers around the world.
According to the indictment, Surgilight's stock price soared tenfold -- from $2.50 a share to about $25 -- between December 1999 and January 2000. When the stock was fully inflated, the indictment alleges, Lin dumped a large amount of stock through two brokerage accounts he maintained in Flushing, N.Y., and transferred $1.7 million in proceeds from the stock sales to Taiwan.
If convicted, Lin faces a maximum of 10 years on the securities fraud charge and 20 years on each of two money-laundering charges. The U.S. Attorney for the Eastern District of New York and the U.S. Postal Inspection Service jointly announced the charges.
The U.S. Securities and Exchange Commission, in a separate civil action Thursday, charged Lin; his wife, Yuchin Lin, 50; and Aaron Tsai, 33; with five securities violations related to the same alleged scheme. Those charges claim that the Lins and Tsai, a financial adviser, had roles in a ploy that yielded $3 million in gains from stock sales.
The SEC suit details the alleged pump and dump operation. In addition, it accuses Tsai of arranging a reverse stock merger in March 1999 that allowed Lin to take his private company public using a shell company.
According to the SEC suit, Surgilight's stock price collapsed after the company failed to deliver on its promises, costing investors millions. The suit asks that the three forfeit gains from the stock sales, pay fines and be enjoined from future securities violations.
Lin, who founded Surgilight in 1998, resigned as chairman and CEO last summer. Surgilight stock lost 2 cents a share Thursday to close at 28 cents. |
