Nov. 24 (Bloomberg) -- The former president of ProNetLink Corp., a defunct Internet company, and eight associates were indicted on charges they made $33 million in illicit stock profits after secretly gaining control of company shares.
Jean Pierre Collardeau, ProNet's former president and chief executive officer, was accused by a U.S. grand jury in Newark, New Jersey, of hiding stock ownership in nominee accounts. The nine falsely touted ProNet on the Internet and used brokerages in Canada to sell shares over-the-counter, authorities allege.
The indictment alleges that this is a systematic, orchestrated fraud that incorporates various elements, including market manipulation,'' Assistant U.S. Attorney Mauro Wolfe said. Collardeau, a French citizen, is one of at least 17 people who were charged with crimes or pleaded guilty to acts related to Marc Armond Rousso and Philippe Hababou. They are French natives who pleaded guilty and helped prosecutors investigate a globalring suspected of laundering tens of millions of dollars.
Rousso and Hababou helped prosecutors investigate the campaign finances of former U.S. Senator Robert Torricelli, a New Jersey Democrat. While Torricelli wasn't charged with a crime, the Senate Ethics Committee admonished him last year for taking gifts from a donor, and he didn't seek reelection.
Collardeau was indicted with four other French citizens, as
well as citizens of the U.S., Senegal and Switzerland. The
indictment accuses them of securities fraud, conspiracy to commit money laundering and conspiracy to commit securities, mail and wire fraud.
Arrested Last Night
Collardeau, who was arrested last night at John F. Kennedy International Airport in New York, appeared today in federal court in Newark. U.S. Magistrate Judge Mark Falk ordered him detained, pending a bail hearing on Dec. 1. Collardeau's attorney Paul Brenner said he hadn't reviewed the indictment.
New York-based ProNet filed for liquidation under the U.S. Bankruptcy Code in July 2001. ProNet, which was organized in
1997, became a public company through a reverse merger with
Prevention Productions, a public shell company, authorities said.
The merger let ProNet avoid making disclosures through an initial public offering, authorities said.
Collardeau and Rousso caused ProNet to issue 20 million shares in the names of conspirators, as well as Swiss and Bahamian companies, without telling the U.S. Securities and Exchange Commission who ran the company, the indictment alleges.
Touted Stock
The conspirators falsely touted the stock through a Web site, stockgenie.com, and traded many of the shares through Pacific International Securities Inc. in Vancouver, authorities said. They also traded through other brokerages in Canada and New Jersey, including Paine Webber Group Inc., now a unit of Zurich-based UBS AG.
Those charged in the indictment included Collardeau, 61, a New York resident; Fode Diop, 47, a Senegal citizen who lives in Rego Park, New York; Irving Freiberg, 46, a resident of Muttontown, New York and Boca Raton, Florida; Irving Stitsky, 49,of Brookville, New York; Jean Daniel Monbaron, 55, of Switzerland; and Nicole Peignier, 61, of France.
Three French citizens who live in the French West Indies also were charged: Martine Meillot, 46; Eric Niger, 41; and Muriel Prochasson, 40.
Freiberg was arrested yesterday and made an initial
appearance today in federal court in West Palm Beach, Wolfe said. He is being held pending a bail hearing on Wednesday.
The nine are accused of conspiring with Hababou, Rousso, and Charles Nisenbaum, a French citizen who was indicted under seal in September 2002 on charges of helping Rousso hide the proceeds of fraudulent stock sales in bank and casino accounts. Nisenbaum pleaded guilty in Newark on Oct. 21 to revised charges. Nisenbaum's attorney, Michael Bachner, declined to comment.
The Collardeau indictment was handed up Nov. 6 and unsealed with his arrest upon returning on a flight from California.
Prosecutors are seeking the criminal forfeiture of $33
million, a Florida property, three New York housing units, and various financial accounts.
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