Don't know if you read this article about Xybernauts underwriter Kensington Wells. "Duffel bags full of cash" LOL
"The defendants then used off-shore accounts to launder the money, sometimes returning profits in duffel bags full of cash, authorities said."
Feds Charge 15 In Stock Fraud
Prosecutors Say They Manipulated Supply of Shares
July 23, 1999
NEW YORK (AP) -- Two brokerage executives were among 15 people charged Thursday with orchestrating a massive stock fraud by manipulating the demand for three initial public offerings.
The fraud, allegedly organized by two key figures at Kensington Wells Inc. on New York's Long Island, occurred in 1994 and 1995. Prosecutors believe it allowed at least 10 brokers and others to pocket millions of dollars in profits at the expense of other investors.
An indictment charged the 15 defendants with securities fraud conspiracy, money conspiracy and money laundering in connection with the alleged manipulation.
Offerings had a pattern
Each of the three initial public offerings, known as IPOs, followed a similar pattern, according to a statement released by federal prosecutors in Brooklyn, the FBI and the Internal Revenue Service.
First, authorities said, Kensington executives Elias Tacher and Salvador Tacher distributed IPO stock to friends who promised to immediately sell the shares to Kensington Wells for a pre-arranged profit. This allowed the company to control a supply of each stock.
Once the stock was in place at Kensington Wells, the defendants artificially inflated its price and marketed it to the public by calling random individuals and overstating the companies' potential so customers would want to buy in, prosecutors said.
Duffel bags full of cash
The defendants then used off-shore accounts to launder the money, sometimes returning profits in duffel bags full of cash, authorities said.
The charges centered on the initial public sales of stock of Universal Automotive Industries Inc., XeChem International Inc., and VideoLan Technologies Inc. No one was accused of wrongdoing at any of those companies.
In addition to the Tachers, charges were filed against 10 brokers at Kensington Wells, the firm's accountant, a Swiss investment banker and a Fahnestock & Co. broker who allegedly laundered Kensington Wells profits.
The Tachers have unlisted telephone numbers and could not be reached immediately for comment.
If convicted, the defendants could be subject to prison terms up to 20 years on the most serious charges, with a $250,000 fine and an order of restitution. |
