12. U.S. v. Les Price and Joseph R. Huard, Jr., a/k/a "Joe Huard,"
Case No. 02- 20626-CR-UNGARO-BENAGES
On July 25, 2002, a federal grand jury returned an Indictment
charging Les Price and Joseph R. Huard, Jr. with one count of wire and
securities fraud conspiracy, in violation of 18 U.S.C. § 371, ten counts of
wire fraud, in violation of 18 U.S.C. §§ 1343 and 1346, and two counts of
securities fraud, in violation of 15 U.S.C. § 78j(b) and 17 C.F.R. §
240.10b-5. The Indictment also charges Price with one count of money
laundering, in violation of 18 U.S.C. § 1956(a)(2)(A). Price was the Chief
Executive Officer and, through nominees, a significant shareholder of
Medinah Minerals, Inc. (MDMN"), the stock of which was publicly traded on
the over-the-counter market. Huard was a licensed securities broker and
one of the founders and officers of Shamrock Partners, Ltd., a securities
brokerage firm located in Media, Pennsylvania. The Indictment alleges that
Price agreed to pay a $1.5 million undisclosed kickback to Huard, the FBI
UCA and others in return for their inducing the Fund to pay $5 million for
5 million shares of MDMN stock. The Indictment also alleges that Price and
Huard conspired to artificially inflate the market price of MDMN stock by
making illegal payments to securities brokers who would sell shares to
their unwitting clients. If convicted, the maximum, statutory term of
imprisonment is 5 years for conspiracy to commit wire/securities fraud,
wire fraud, and mail fraud, respectively, and 10 years for securities
fraud.
13. U.S. v. Joseph R. Huard, Jr., James T. Kelly and Bruce D. Cowen
, Case No. 02- 20473-CR-GRAHAM
On May 28, 2002, a federal grand jury returned an Indictment charging
Joseph R. Huard, Jr., James T. Kelly and Bruce D. Cowen with one count of
wire, mail and securities fraud conspiracy, in violation of 18 U.S.C. §
371, four counts of wire fraud, in violation of 18 U.S.C. §§ 1343 and 1346,
one count of mail fraud, in violation of 18 U.S.C. §§ 1341 and 1346, and
one count of securities fraud, in violation of 15 U.S.C. § 78j(b) and 17
C.F.R. § 240.10b-5. Huard and Kelly were licensed securities brokers and
officers of Shamrock Partners, Ltd., a securities brokerage firm located in
Media, Pennsylvania. Cowen was a Managing Director of a purported New
York-based hedge fund called The Lancer Group, and the Chairman of Capital
Research, Ltd. Capital Research is alleged to have engaged in investment
activities for Lighthouse Fast Ferry, Inc. ("LHFF"), the stock of which was
publicly traded on the over-the-counter market. The Indictment alleges
that Huard, Kelly, and Cowen conspired to transfer LHFF restricted stock
from The Lancer Group to Capital Research for purchase by the Fund for a
total of $5 million. In return, Huard, Kelly and Cowen would divert 30% of
the stock sale proceeds for undisclosed payments of $600,000 to themselves
and $900,000 to the FBI UCA and others. If convicted, the maximum,
statutory term of imprisonment is 5 years for conspiracy to commit
wire/mail/securities fraud, wire fraud, and mail fraud, respectively, and
10 years for securities fraud.
14. U.S. v. Anthony M. Damato, Geoffrey W. Gazda and James Cary
Parrish a/k/a "Cary Parrish," Case No. 02-20456-CR-MORENO
On May 23, 2002, a federal grand jury returned an Indictment charging
Anthony M. Damato, Geoffrey W. Gazda, and James Cary Parrish with one count
of securities fraud conspiracy, in violation of 18 U.S.C. § 371, and one
count of securities fraud, in violation of 15 U.S.C. § 78j(b) and 17 C.F.R.
§ 240.10b-5. Damato was the Chairman and a major stockholder of Eagle
Building Technologies, Inc. ("EGBT"), the stock of which was publicly
traded on the over-the-counter market. Gazda was the President, Director,
and Treasurer of GWG Corporation, and Parrish the President and Chief
Operating Officer of Sealant Solutions, Inc. ("SSLU"). The Indictment
charges that Damato, Gazda and Parrish conspired to have EGBT sell
restricted stock to the Fund for a total of $4.2 million. The undisclosed
kickback was to be paid by Damato transferring $2 million from the stock
sale proceeds to Gazda and Parrish by means of a loan to Gazda's company,
GWG Corporation, which was to be secured by SSLU stock. Gazda and Parrish,
in turn, were to kickback half this loan ($1 million) to the FBI UCA and
others in return for their inducing the Fund to buy the EGBT restricted
stock. If convicted, the maximum, statutory term of imprisonment is 5
years for conspiracy to commit securities fraud, wire fraud, and mail
fraud, respectively, and 10 years for securities fraud.
15. U.S. v. Paul D. Lemmon and Mark Valentine, Case No.
02-80088-CR- FERGUSON
On May 14, 2002, a federal grand jury returned an Indictment charging
Paul D. Lemmon and Mark Valentine with one count of wire, mail and
securities fraud conspiracy, in violation of 18 U.S.C. § 371, and two
counts of securities fraud, in violation of 15 U.S.C. § 78j(b) and 17
C.F.R. § 240.10b-5. Lemmon was the founder and Managing Director of
Voyager Group, Ltd., a financial services company based in Bermuda.
Valentine was the Chairman of Thomson Kernaghan & Co., a securities
broker-dealer based in Toronto, Canada. Valentine is also alleged to have
owned and controlled a majority of the stock of C-Me-Run, Inc. ("CMER"),
SoftQuad Software Ltd. ("SXML"), and JagNotes.com, Inc. ("JNOT"), three
companies the stock of which was publicly traded on the over-the-counter
market. The Indictment charges that Lemmon and Valentine conspired to sell
CMER, SXML and JNOT stock to the Fund for a total of $29.4 million in
return for their payment of an undisclosed kickback of $7.8 million to the
FBI UCA and others. In addition, the Indictment charges that Lemon and
Valentine were to cause securities brokers to receive undisclosed kickbacks
in return for their helping to manipulate the market prices of CMER, SXML
and JNOT stock by selling the stock to their unsuspecting clients. If
convicted, the maximum, statutory term of imprisonment is 5 years for
conspiracy to commit wire/mail/securities fraud, wire fraud, and mail
fraud, respectively, and 10 years for securities fraud.
16. U.S. v. Paul D. Lemmon, Andrew K. Proctor, Michael T. Reiter
and Justyn S. Feldman, Case No. 02-80087-CR-HURLEY
On May 14, 2002, a federal grand jury returned an Indictment charging
Paul D. Lemmon, Andrew K. Proctor, Michael T. Reiter and Justyn S. Feldman
with one count of wire and securities fraud conspiracy, in violation of 18
U.S.C. § 371, and one count of securities fraud, in violation of 15 U.S.C.
§ 78j(b) and 17 C.F.R. § 240.10b-5. Lemon was the founder and Managing
Director of Voyager Group Ltd., and Proctor was a Director of Voyager
Group, a financial services company based in Bermuda. Proctor was the
Chairman, Chief Financial Officer and a Director of CT Cosmetics, Inc.
("CCHO"), the stock of which was being registered to become publicly traded
in the United States. Reiter was a stock promoter and Feldman was a
licensed securities broker and Vice- President of Dalton Kent Securities
Group, Inc., a registered securities broker-dealer located in New York.
The Indictment charges that Lemmon and Proctor conspired to sell CCHO stock
to the Fund for a total of $6 million in return for their payment of an
undisclosed kickback payment of $3 million to the FBI UCA and others.
Reiter and Feldman were also to receive undisclosed kickbacks to help
manipulate the market price of CCHO stock in connection with the kickback
scheme. If convicted, the maximum, statutory term of imprisonment is 5
years for conspiracy to commit wire/securities fraud and 10 years for
securities fraud.
17. U.S. v. Paul D. Lemmon, Paul Derome and Andrew K. Proctor, Case
No. 02- 80086-CR-HURLEY
On May 14, 2002, a federal grand jury returned an Indictment charging
Paul D. Lemmon, Paul Derome and Andrew K. Proctor with one count of wire,
mail and securities fraud conspiracy, in violation of 18 U.S.C. § 371, and
one count of securities fraud, in violation of 15 U.S.C. § 78j(b) and 17
C.F.R. § 240.10b-5. Lemmon was the founder and Managing Director of
Voyager Group Ltd., and Proctor was a Director of Voyager Group, a
financial services company based in Bermuda. Derome was the President and
majority shareholder of New Anaconda Company ("NANA"), the stock of which
was publicly traded on the over-the-counter market. The Indictment charges
that the defendants conspired to sell NANA stock to the Fund for a total of
$8 million in return for their paying an undisclosed kickback of $2 million
of the sale proceeds to the FBI UCA and others. If convicted, the maximum,
statutory term of imprisonment is 5 years for conspiracy to commit
wire/mail/securities fraud, wire fraud, and mail fraud, respectively, and
10 years for securities fraud.
18. U.S. v. Walter Dorow, a/k/a "Art Dorow," Frank Dickey, Jr., Dax
Ross, Ashley Sosner, Cris Sagnelli, Richard Greene and Tim Rice, Case No.
02-60165-CR- ZLOCH
On August 8, 2002, a federal grand jury returned a four-count
Indictment charging Walter Dorow, Frank Dickey, Jr., Dax Ross, Ashley
Sosner, Cris Sagnelli, Richard Greene, and Tim Rice with conspiracy to
commit mail and securities fraud, in violation of 18 U.S.C. § 371, and
securities fraud,15 U.S.C. § 78j(b) and 17 C.F.R. § 240.10b-5. Walter
Dorow and Richard Greene were also charged with mail fraud, in violation of
18 U.S.C. §§ 1341 and 1346. Dorow was a stock promoter. Frank Dickey,
Jr., was the President and CEO for Equity Technologies & Resources, Inc.
("ETCR"), a publicly-traded corporation. Dax Ross and Ashley Sosner were
licensed and registered stockbrokers for a Boca Raton, Florida securities
broker-dealer. Cris Sagnelli was a licensed stockbroker in Boca Raton.
Greene was an attorney who specialized in the field of securities laws.
Tim Rice owned large amounts of shares of ETCR stock. The Indictment
charges that these defendants conspired to pay undisclosed kickbacks of
approximately $1.3 million in cash and in stock issued pursuant to
fraudulent Form S-8 Registration to the FBI UCA and others in return for
their inducing the Fund to purchase approximately $8.5 million worth of
overpriced shares of ETCR and Movie-O-Network, Inc. ("MVEO") stock, another
corporation that was contemplated to go public. As part of the schemes,
the defendants bribed two purported due diligence officers of the Fund and
agreed to enlist and make illegal payments to corrupt securities brokers
who would, in turn, recommend and sell shares of ETCR and MVEO stock to
their customers, instead of shares of another company stock, so as to
artificially inflate the market prices of ETCR and MVEO stocks. If
convicted, the maximum, statutory term of imprisonment is 5 years for
conspiracy to commit mail/securities fraud and 10 years for securities
fraud
19. U.S. v. James Cary Parrish, a/k/a "Cary Parrish," a/k/a/ "J.
Cary Parrish" and Geoffrey Gazda, Case No. 02-60126-CR-FERGUSON
On June 25, 2002, a federal grand jury returned an Indictment
charging James Cary Parrish and Geoffrey Gazda with one count of wire and
securities fraud conspiracy, in violation of 18 U.S.C. § 371, one count of
wire fraud, in violation of 18 U.S.C. §§ 1343 and 1346, and one count of
securities fraud, in violation of 15 U.S.C. § 78j(b) and 17 C.F.R. §
240.10b-5. Parrish was the President, Chief Operating Officer and Chief
Financial Officer of Sealant Solutions, Inc. ("SSLU"), the stock of which
was publicly traded on the over-the-counter market. Gazda was a consultant
to SSLU and an officer of GWG Corporation. The Indictment charges that
Parrish and Gazda conspired to pay a $3 million undisclosed kickback to the
FBI UCA and others in return for their inducing the Fund to purchase
approximately $9 million of overpriced SSLU stock. The kickback payments
were to made through GWG Corporation. If convicted, the maximum, statutory
term of imprisonment is 5 years for conspiracy to commit wire/securities
fraud and wire fraud, respectively, and 10 years for securities fraud.
20. U.S. v. Mario Turcotte, Sheldon Mickelson, Richard Carson and
Serdar Kalaycioglu, Case No. 02-80107-CR-HURLEY
On June 25, 2002, a federal grand jury returned an Indictment
charging Mario Turcotte, Sheldon Mickelson, Richard Carson and Serdar
Kalaycioglu with one count of wire fraud conspiracy, in violation of 18
U.S.C. § 371, and four counts of wire fraud, in violation of 18 U.S.C. §§
1343 and 1346. Turcotte, Mickelson, Carson and Kalaycioglu were officers
and/or shareholders of Meridian Investment Bank, Ltd. ("Meridian Bank"), an
offshore bank located in Grenada, West Indies. The Indictment further
alleges that the defendants conspired to pay a $10 million undisclosed
kickback to the FBI UCA and others in return for their inducing the Fund to
purchase approximately $40 million worth of certificates of deposits issued
by Meridian Bank. The kickback payments were to made through Golden Eagle,
an offshore corporation controlled by Turcotte and Mickelson. If
convicted, the maximum, statutory term of imprisonment is 5 years for
conspiracy to commit wire fraud and wire fraud, respectively. |
