=DJ IN THE MONEY: NC Criminal Case Moves Ahead With Guilty Plea
By Carol S. Remond
A Dow Jones Newswires Column
NEW YORK (Dow Jones)--The criminal probe into the alleged manipulation of the alleged manipulation of Absolute Health and Fitness (AHFI), Concorde America (CNDD) and other penny stocks took a big step forward with the guilty plea of one of the money men involved.
Howell Woltz, an officer of several financial firms used to transfer offshore millions in illegal gains, pleaded guilty earlier this week to a tax fraud and money laundering scheme.
Woltz, his wife Vernice Chaitan Woltz and others were charged with tax fraud and obstruction of justice in the U.S. District court for the Western District of North Carolina in April. The Woltzes had been held in jail since then.
One of the Woltzes' accomplices, former U.S. attorney Sam Currin, already pleaded guilty in October to charges that he conspired to launder $1.3 million through offshore accounts. Currin also pleaded guilty to two counts of obstruction.
In his plea agreement, Woltz said that he and others "concocted a plan to promote offshore 'dual trust' arrangements to individual in the U.S., that among other things, could have been used to evade federal income taxation."
Woltz also said in that between September 2004 and March 2005, offshore entities created by him and his wife were used to transfer about $20 million in fraudulent stock promotion gains for two individuals identified as Mr. J, an Internet Spammer, and Mr. K., a resident of Montreal. "I hereby acknowledge that I knowingly laundered or caused to be laundered more than $7 million worth of these funds," Woltz said.
According to a bill of information filed by the U.S. Attorney office on Jan. 29, the Woltzes, Currin and other unnamed individuals conspired to commit securities fraud and money laundering.
The North Carolina criminal case against the Woltzes, Currin and others stems from a civil case filed against penny stock companies, promoters and entities associated with them by the Securities and Exchange Commission in the U.S. District Court for the Southern District of Florida in 2004.
In that case, the SEC accused two stock promoters - Donald Oehmke and Bryan Kos - and related companies of having pumped the stocks of the two companies.
Jeremy Jaynes, a man convicted of spamming and sentenced to a nine-year jail term in Virginia, was also at the center of the SEC case, although he was not charged in that case.
Without denying or admitting the charges, Kos, Oemke settled with the SEC last year. Under their respective deals with the SEC, both promoters agreed not to violate securities laws, they are barred from participating in penny stock offerings and enjoined from participating in unregistered stock offerings. As part of their respective settlements, Oehmke agreed to disgorgement and civil penalties of $1,454,484, while Kos agreed to repay $499,573.
More legal troubles seems to be looming for Oehmke and Kos though, as they are both front and center in the government's recent bill of information. Both are identified by their initials. Kos is also mentioned by his initial in Wotlz' guilty plea agreement.
Jaynes is also mentionned in both documents as Currin's business partner.
Meanwhile, Florida lawyer Jere Ross also appears to getting the attention of North Carolina's District Attorney. Both men are also only identified by their initials.
As part of his plea agreement, Woltz agreed to forfeit funds held by offshore entities he controlled, including $140,000 held at First Caribbean International Bank and Merrill Lynch International.
The Woltzes and Currin were caught last year in an undercover investigation scheming to defraud the Internal Revenue Service through the use of offshore trusts. They were all officers of offshore firms dubbed the Sterling entities.
(Carol S. Remond is an award-winning columnist who won a Gerald Loeb Award in 2005 for best news service content with "Exposing Small-Cap fraud," a series of articles that described how three small companies unscrupulously pumped up their stocks.)
-By Carol S. Remond, Dow Jones Newswires; 201-938-2074;
carol.remond@dowjones.com
(END) Dow Jones Newswires
02-02-07 1927GMT
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