20 years for a pump and dump scam. Maybe that will deter a few others !!
CO2 Tech's Curshen turned down by Supreme Court
2015-02-02 09:49 MT - Street Wire
by Mike Caswell
Jonathan Curshen, the Vancouver-linked man serving 20 years in jail for a pink sheets pump-and-dump, has lost his final avenue of appeal, to the Supreme Court of the United States. The court has denied his petition for a writ of certiorari, which means that it will not hear the case. As is customary, the court did not provide its reasons for the denial. The decision means that Mr. Curshen's best chance at release will be to remain on his best behaviour while in jail. His scheduled release date, if he serves his entire sentence, is in 2029.
Mr. Curshen's jail term stems from the 2007 pump-and-dump of CO2 Tech Ltd., a company that purportedly made pollution control products. Prosecutors said that he was a central figure in a scheme to manipulate the stock. He entered several wash trades using a maze of offshore brokerage accounts while the company made bogus claims about a relationship with Boeing. He and others, including former Pacific International Securities Inc. broker David Ricci, boosted the stock to $1.65 from 91 cents. (All figures are in U.S. dollars.) A Florida jury convicted Mr. Curshen after an 11-day trial in January, 2012, and a judge later sentenced him to 20 years in jail.
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It is not clear what Mr. Curshen's arguments before the Supreme Court would have been, but they likely would have mirrored those he used in an earlier application to the Court of Appeals for the Eleventh Circuit. There he complained that prosecutors improperly influenced the jury at his trial by bringing in evidence of stock promotions for which he faced no charges. He said one of the witnesses testified about three specific stocks and told the jury there were "probably 10 other deals." The trial record included dozens of mentions of stocks that were not part of the charges (which only related to CO2 Tech), according to his appeal notice.
The Eleventh Circuit quickly rejected that appeal. On May 28, 2014, just one week after hearing arguments in the case, the appeal judges released their decision. They found that the trial record provided "overwhelming evidence of the defendants' fraud." They agreed that there was some question as to whether the judge should have allowed evidence of other promotions, but said the outcome would have been the same.
Mr. Curshen filed his final appeal, to the Supreme Court, on Nov. 13, 2014. The first step in such an appeal is to file a petition for a writ of certiorari, effectively asking for permission to begin the case. The court rejected Mr. Curshen's request in a two-line letter dated Jan. 12, 2015, which simply states the petition is denied.
The CO2 Tech pump-and-dump
The CO2 Tech manipulation is best described in a parallel civil complaint that the U.S. Securities and Exchange Commission filed against Mr. Curshen and others on Feb. 18, 2011, in the Southern District of Florida. According to the SEC, Mr. Curshen ran the scheme from Costa Rica, through a company he controlled called Red Sea Management Inc. The SEC said the purpose of Red Sea was to provide market manipulation and money laundering services using a network of brokerage and nominee accounts it controlled in the United States and Canada.
The CO2 Tech manipulation, as described by the SEC, came about in early 2007 when two Israeli men, Ariav Weinbaum and Yitzchak Zigdon, hired Red Sea. The men controlled the company's entire public float of 22.5 million shares and were looking to sell large quantities of that stock, the SEC said. They enlisted the help of Mr. Curshen to carry out the plan, according to the complaint.
As part of the manipulation, the company issued a pair of false news releases on Jan. 29 and Jan. 30, 2007, the SEC said. Among other things, CO2 Tech claimed that Boeing had taken an interest in one of its products. In reality, Boeing had no such interest, according to the SEC. Prior to issuing the news, CO2 Tech had no communication with Boeing, and after it only received a cease-and-desist letter from the aircraft manufacturer.
Around the same time, Mr. Curshen and Mr. Ricci participated in a series of matched trades to boost the stock. With the assistance of others they manipulated the company to $1.65 from 91 cents. The SEC said they were then able to dump millions of shares, selling $5.5-million worth on the day of the Boeing news. In all, Red Sea obtained $7-million in profits for Mr. Weinbaum and Mr. Zigdon, the complaint stated.
In filing the case, the SEC acknowledged the assistance of the B.C. Securities Commission and several other agencies. The SEC did not say exactly what the BCSC's aid entailed, but in the criminal case prosecutors said that Mr. Curshen routed the proceeds from his scheme through an account at HSBC in Vancouver. The account received $91.5-million, with most of the money coming from various pump-and-dumps, the government claimed.
The only Canadian charged in the case was Mr. Ricci, who pleaded guilty early and received 18 months in jail. He completed his sentence on Aug. 30, 2013. When he was in Vancouver, Mr. Ricci worked at PI for five years, leaving the firm on Nov. 17, 1999.
Mr. Curshen, when he finally gets out of jail, will remain banned from penny stocks for life. On Nov. 1, 2012, the SEC entered a permanent ban against him for the CO2 Tech pump-and-dump. The ban was the second time the SEC had permanently barred him. The first came in 2000, for another Vancouver-linked pump-and-dump, that of Freedom Golf Inc. The trial in that case included testimony from former Union Securities Ltd. employees Trevor Koenig and Joe Fernando, who worked at the firm's controversial White Rock branch.
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