MANHATTAN (CN) – Federal prosecutors charged 13 people, including corporate officers, lawyers and a stock promoter, with using kickbacks and other criminal schemes to lure investors to thinly traded stocks. The SEC filed parallel civil cases against three men and a company.
The criminal case “involved secret kickbacks to an investment fund representative in exchange for having the investment fund buy stock in certain companies; the kickbacks were to be concealed through the use of sham consulting agreements,” the U.S. Attorney’s Office said. “What the insiders and promoters did not know was that the purported investment fund representative was actually an undercover agent.
“The criminal defendants include Kelly Black-White and James Prange, both of whom were in the business of finding capital for emerging companies. The civil case names some of the individuals who were charged criminally, and the SEC also issued trading suspensions in the stocks of a number of the companies involved in the criminal cases.”
The SEC suspended trading in seven microcap companies allegedly involved in the kickback scheme: 1st Global Financial Inc., based in Las Vegas; Augrid Global Holdings Corp., based in Houston; ComCam International Inc., based in West Chester, Pa.; MicroHoldings US, Inc., based in Vancouver, Wash.; Outfront Companies, based in Florida; Symbollon Corp./Symbollon Pharmaceuticals, based in Medfield, Mass.; and ZipGlobal Holdings Inc., based in Hingham, Mass.
Here are the criminal defendants:
Kelly Black-White, 51, of Mesa, Ariz. (Operator of Premier Funding, Inc. and Premiere Services, Inc.), charged with wire fraud.
James Prange, 60, of Greenbush, Wis. (Northern Equity, Inc.), charged with wire fraud.
Michael Lee, 51, of Hingham, Mass. (CEO of ZipGlobal), charged with mail fraud and conspiracy to commit securities fraud.
Edward Henderson, 69, of Lincoln, R.I., charged with wire fraud.
Paul DesJourdy, 50, of Medfield, Mass. (CEO of Symbollon Pharmaceuticals), charged with mail fraud and conspiracy to commit securities fraud.
James Wheeler, 51, of Camas, Wash. (CEO MicroHoldings, Inc.), charged with mail fraud and conspiracy to commit securities fraud.
Steve Berman, 49, of Hillsboro, Ohio (CEO of China Wi-Max Communications), charged with mail and wire fraud.
Richard Kranitz, 68, of Grafton, Wis. (Board Member of China Wi-Max Communications), charged with mail and wire fraud.
J.C. Jordan, 60, of Cameron Park, Calif. (CEO of Vida Life International, LTD), charged with mail and wire fraud.
Karen Person, 61, of Naperville, Ill. (President of Small Business Company, Inc.), charged with mail and wire fraud.
Albert Reda, 65, of Tustin, Calif. (Treasurer of 1st Global Financial), charged with mail and wire fraud.
Steve Stuart, 48, of Monrovia, Md. (Major Shareholder in ComCam International, Inc.), charged with mail and wire fraud.
Muhammad (“M.J.”) Shaheed, 44, of Houston, Texas (CEO of Augrid Global Holdings Corporation), charged with mail and wire fraud.
The SEC filed civil charges against Desjourdy, Henderson, Wheeler, and Microholdings US.