First, regarding the nature and circumstances of the offense, the count of conviction relates to a single isolated filing with the SEC constituting a discrete act and not a continuing course of criminal conduct.
Second, regarding the history and characteristics of the defendant, it should be noted that during a substantial duration of the relevant events, Metter was suffering from ocular cancer and was undergoing treatment for that disease. Moreover, the defendant has no criminal history and is not a likely recidivist.
Third, regarding deterrence, the public will be protected against any future fraudulent conduct by Metter. As the Court is aware, the defendant has entered into an agreement with the SEC whereby he agreed to be barred from ever serving as an officer or director of a public company and further agreed to be barred from the penny stock industry entirely. Moreover, the defendant will be financially punished. The agreement with the SEC permits the Court, with full information from the SEC, to order disgorgement of any and all ill-gotten gains, civil penalties and reimbursements pursuant to Section 304 of the Sarbanes-Oxley Act. See Securities and Exchange Commission v. Spongetech Delivery Systems, Inc., et al., 10 CV 2031 (DLI), Docket Entry 255. The Court may, in its discretion, make compliance with any disgorgement order or civil penalties a special condition of the defendant’s probation in the event the Court approves the proposed plea agreement.
Fourth, regarding just punishment, as a result of the criminal action and the SEC proceeding, the defendant has suffered collateral consequences. Namely, he had been president of Business Talk Radio (“BTR”) since 2002 and received compensation from that job ranging from $160,000 to $200,000 per annum. He has been removed from that position in the wake of the SEC’s enforcement proceedings.
Fifth, a probationary sentence will not result in unwarranted sentencing disparities among defendants with similar records who have been found guilty of similar conduct. In the originally charged case, the Court sentenced three other defendants. Defendants Thomas Cavanagh and Frank Nicolois pleaded guilty to structuring and were sentenced to 24 months and 16 months, respectively. See Docket Entries 198 and 223. Cavanagh and Nicolois sold Spongetech securities to European investors and structured their commissions in a way to avoid detection from the authorities and to avoid paying multi-million dollar judgments held by the SEC in connection with an earlier fraud led by Cavanagh and Nicolois. This criminal activity is unrelated to Metter’s false statements to the SEC charged in the superseding information. George Speranza was a low-level operative who created websites and virtual offices for Spongetech’s non-existent customers and then lied to the SEC. Speranza pleaded guilty to perjury and was sentenced to probation. See Docket Entry 167.
* * *
For all these reasons, the parties request that the Court approve the attached proposed plea agreement as contemplated by Federal Rule of Criminal Procedure 11(c)(1)(C).
Respectfully submitted,
LORETTA E. LYNCH
United States Attorney
By: /s/
Patrick Sean Sinclair
Assistant U.S. Attorney
(718) 254-6402
cc: Maranda Fritz, Esq. (w/ attachments via e-mail)
Clerk of the Court (DLI) (w/ attachments via hand and w/o attachments via ECF)
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