SEC charges eight men in alleged pump-and-dumps
2009-05-22 14:23 ET - Street Wire
See Street Wire (C-*SEC) U.S. Securities and Exchange Commission
by Mike Caswell
The U.S. Securities and Exchange Commission has filed civil fraud charges against eight men who allegedly made $6.2-million pumping and dumping four separate stocks. (All figures are in U.S. dollars.) The companies include Playstar Corp., an Ontario pink sheets listing that purported to be developing a proprietary text message system for cellphones. The SEC alleges that the men received free-trading shares of Playstar and the three other companies for little money, and then sold them on the market after manipulating the stocks.
In addition to the SEC case, seven of the men are facing criminal charges in parallel indictments unsealed Thursday in the District of Delaware. Those criminally indicted include Matthew Brown, 26, who operates the penny stock website InvestorsHub.com. Others indicted were Pawel Dynkowski, 24, of Delaware; Joseph Mangiapane, 43, of California; Marc Riviella, 50, of California; Jacob Canceli, 50, of California; Gerard D'Amaro, 38, of Florida; and Angelo "Bill" Panetta, 48, of California. The defendants in the SEC case include an eighth man not criminally charged, Adam Rosengard of New Jersey.
SEC's complaint
The SEC, in a complaint filed May 21, 2009, in the District of Delaware, claims that the manipulations happened in 2006 and 2007, and followed a similar pattern. First, Mr. Dynkowski and his accomplices agreed to sell large blocks of shares of penny stock companies in exchange for a portion of the proceeds, the SEC claims. It says the companies placed these shares in nominee accounts that Mr. Dynkowski controlled. Then, Mr. Dynkowski and the other defendants pumped the stocks through wash sales and matched orders, often timed with false or misleading news releases from the companies, the complaint states. After artificially inflating the stocks, Mr. Dynkowski and the other defendants allegedly sold the shares and split the illicit profits.
The complaint identifies four companies that were manipulated in the scheme: GH3 International Inc., Asia Global Holdings Inc., Playstar Corp. and Xtreme Motorsports of California Inc. The Playstar scheme began in October, 2006, the SEC says. Between Oct. 18 and Dec. 19, 2006, Playstar allegedly arranged for 39.6 million shares to be transferred to two accounts controlled by Mr. D'Amaro. At the company's direction, these shares had no restrictive legends, meaning they could be freely traded, the complaint states.
Starting on Oct. 19, 2006, Mr. Dynkowski allegedly used these shares to dramatically increase the company's price by arranging wash sales and matched orders that accounted for millions of shares in volume. At the same time, Mr. D'Amaro had Playstar's chief executive officer issue numerous misleading news releases touting the company, the SEC says. The stock subsequently rose from half a penny on Oct. 18, 2006, the day before the alleged pump started, to 12 cents by Nov. 9, 2006.
As the stock rose, Mr. Dynkowski and Mr. D'Amaro allegedly started selling shares from the nominee accounts. The SEC says that in total, they sold 39.6 million shares of Playstar for a profit of $1.18-million, which they divided between themselves and Playstar or its representatives. The complaint does not make specific allegations against anybody at Playstar, nor does it identify who at the company provided Mr. Dynkowski and Mr. D'Amaro with the shares.
The SEC claims that during the pump-and-dump, Playstar issued a news release designed to mislead shareholders into believing that naked short-sellers were responsible for massive selling of the stock. The news release stated that the company had ordered a list of non-objecting beneficial owners from its transfer agent. "In reality, the alleged naked short selling was actually Dynkowski dumping the shares he had received from Playstar," the complaint states.
The SEC says the largest of the three pump-and-dumps was Asia Global Holdings, which purported to have the rights to the show "Who Wants to be a Millionaire" in China. According to the complaint, the men made $4.05-million dumping Asia Global. Mr. Dynkowski and Mr. Brown allegedly dumped the shares using nominee accounts opened by Mr. Mangiapane and Mr. Riviella, who used their positions as registered representatives at California brokerage AIS Financial Inc. for the scheme.
According to the complaint, the manipulative trades helped boost the stock from 11.5 cents on Aug. 9, 2006, to a high of 41 cents on Aug. 25, 2006. While Mr. Dynkowski and Mr. Brown were selling shares from nominee accounts, they had the company issue a news release touting its second quarter 2006 results, the SEC claims. "Dynkowski told Brown to 'make it sound good ... like AAGH [Asia Global] announces record revenue net profits [sic]' and suggested that the press release state that the company's profits had increased by at least 300%," the complaint reads. The company then issued a news release claiming that its second quarter net income rose 370 per cent, the SEC notes.
The SEC is seeking injunctions preventing future violations of the U.S. Securities Act, appropriate civil penalties and disgorgement, as well as permanent penny stock bans against Mr. Dynkowski, Mr. Brown, Mr. Canceli, Mr. D'Amaro and Mr. Rosengard.
The seven men that were named in the criminal case face varying sentences, should they be found guilty. Mr. Dynkowski and Mr. Mangiapane have the longest potential sentence. They are charged with nine counts of fraud, each of which carries a maximum penalty of 20 years in jail and a fine of up to $5-million.
In a statement issued Thursday, the U.S. Attorney's Office in Delaware said that law enforcement had been investigating the case since 2007. The agencies involved included the Department of Homeland Security, the Internal Revenue Service and the Delaware State Police.
Reader Comments - Comments are open and unmoderated, although libelous remarks may be deleted. Opinions expressed do not necessarily reflect the views of Stockwatch.
Allow me to introduce myself, my name is Matt Brown, me and my market maker buddies (the infamous Janice Shell included) run a website called Investors Hub which we use to manipulate penny stocks long or short. As moderators we have complete editing power over the boards, so thing have always worked out in our favor. $6.2 million can buy a lot of lawyers, so we aren't worried about the SEC. Remember, if you post in iHub you better be with us, otherwise I will make your posts go away!
Posted by Matt Brown @ 2009-05-22 14:33
Litigation is nothing new to Ihub and friends:
"San Francisco-based press release distributor BusinessWire announced late Monday that it has filed a federal court lawsuit against Jeffrey Mitchell, William Ulrich and Janice Shell after they posted an April Fools press release through its service. The company alleges violations of federal and state trademark laws, fraud, breach of contract, defamation and conspiracy and seeks unspecified damages and injunctive relief.
Posted by Janice Shell @ 2009-05-22 14:55
Mafia money may have been involved. Here is the 2007 story about Pawel Dynkowski
""The money-laundering case is suspected to have ties to the Genovese crime family in New York.""
""After money was recovered in Texas, authorities in Delaware made one major arrest in the case. Pawel Dynkowski, 21, of Newark, Del., was arrested Feb. 10 on suspicion of laundering money, and more search warrants were issued the following day, Luciano said.""
Troopers aid in scam case By Jayna Boyle Saturday, February 17, 2007
Texas Department of Public Safety troopers in San Angelo helped make major breaks in a nationwide money-laundering investigation and recovered more than $150,000 recently.
Working with the Sutton County Sheriff’s Department and the DPS Texas Highway Patrol Division, San Angelo DPS Narcotics Service officers intercepted $155,300 in cash on Feb. 8 that was being shipped through the Concho Valley, said Sgt. Vince Luciano with San Angelo DPS Narcotics. The money was coming from California on its way to Delaware.
The money laundering scam is known as a “pump and dump” stock market scheme in which the culprit pumps up the values of stock on a fictitious company to draw in investors.
The manner in which the money was seized cannot be revealed because it is part of an ongoing investigation, Luciano said. One man — a Florida resident — who had the money was arrested, but authorities cannot release his name because the investigation is ongoing.
Authorities have been investigating the case for about nine months, Luciano said. Police officials do not know how long the money scam has been going on, he said, but some estimate at least seven years.
Luciano said authorities have not identified all the artificial companies involved in the operation. He said the companies have been posing as Internet-based businesses.
Because most of the money laundering occurs through online trading, Luciano said, most people do not realize that they have been victims, and authorities do not know how many people have been victims of the fraud.
It is yet to be determined whether money was regularly brought through Texas, Luciano said. The money-laundering case is suspected to have ties to the Genovese crime family in New York.
After money was recovered in Texas, authorities in Delaware made one major arrest in the case. Pawel Dynkowski, 21, of Newark, Del., was arrested Feb. 10 on suspicion of laundering money, and more search warrants were issued the following day, Luciano said.
In the Delaware arrest and search warrants, police recovered $109,642 in cash and five vehicles totaling $440,000 in value and suspected of being purchased with laundered money.
Authorities are looking for at least five others regarding the money-laundering scam, Luciano said.
Other law enforcement agencies involved in the investigation include the Delaware State Police; the Orange County, Calif., organized crime unit; and U.S. Immigration and Customs Enforcement.
Luciano said to avoid becoming a victim of a “pump and dump” stock market scam, research the companies in which you plan to invest, and do not do all the research online.
If you suspect that you have invested in a fraudulent company, contact the U.S. Securities and Exchange Commission.
Posted by WayToGoMattBrowneAndIHUB @ 2009-05-22 15:50
l enjoyed the last line 'if you suspect you have invested in a fraudulent company ,contact the U>S> securitiesAND EXCHANGE COMMISSION.WELL IN CANANADA IT CALLED PLACING YOURE BET WITH THE PENNY STOCK COMPANY THAT IS ABLE TO RAISE THE MOST CAPITAL AND HAVE THE BEST STORY,THEN HOLD YOUR BREATH,SOME BECOME THE REAL DEAL THATS WHAT THE GAMBLE IS ALL ABOUT,THREE CHEERS FOR THE RISK TAKERS ON THE VENTURE EXCHANGE AFTER DOING THERE OWN DUE DIILIGENCE,the kakunda
Posted by KAKUNDA @ 2009-05-22 16:28
KAKUNDA, are you suggesting outright fraud by low life scumbag penny stock criminals is normal business in the stock market and all risk lies with investors? What do you think about operators of penny stock tout websites being in on these scams? Ihub is the worst when it comes to so called "moderators" manipulating message boards to serve their own agendas.
Ihub is a disgrace to the entire securities industry. It should be shut down and the crooked operators sent to prison for 20 years.
Posted by IHUB CRIMINALS @ 2009-05-22 17:01
2009-05-22 14:23 ET - Street Wire
See Street Wire (C-*SEC) U.S. Securities and Exchange Commission
by Mike Caswell
The U.S. Securities and Exchange Commission has filed civil fraud charges against eight men who allegedly made $6.2-million pumping and dumping four separate stocks. (All figures are in U.S. dollars.) The companies include Playstar Corp., an Ontario pink sheets listing that purported to be developing a proprietary text message system for cellphones. The SEC alleges that the men received free-trading shares of Playstar and the three other companies for little money, and then sold them on the market after manipulating the stocks.
In addition to the SEC case, seven of the men are facing criminal charges in parallel indictments unsealed Thursday in the District of Delaware. Those criminally indicted include Matthew Brown, 26, who operates the penny stock website InvestorsHub.com. Others indicted were Pawel Dynkowski, 24, of Delaware; Joseph Mangiapane, 43, of California; Marc Riviella, 50, of California; Jacob Canceli, 50, of California; Gerard D'Amaro, 38, of Florida; and Angelo "Bill" Panetta, 48, of California. The defendants in the SEC case include an eighth man not criminally charged, Adam Rosengard of New Jersey.
SEC's complaint
The SEC, in a complaint filed May 21, 2009, in the District of Delaware, claims that the manipulations happened in 2006 and 2007, and followed a similar pattern. First, Mr. Dynkowski and his accomplices agreed to sell large blocks of shares of penny stock companies in exchange for a portion of the proceeds, the SEC claims. It says the companies placed these shares in nominee accounts that Mr. Dynkowski controlled. Then, Mr. Dynkowski and the other defendants pumped the stocks through wash sales and matched orders, often timed with false or misleading news releases from the companies, the complaint states. After artificially inflating the stocks, Mr. Dynkowski and the other defendants allegedly sold the shares and split the illicit profits.
The complaint identifies four companies that were manipulated in the scheme: GH3 International Inc., Asia Global Holdings Inc., Playstar Corp. and Xtreme Motorsports of California Inc. The Playstar scheme began in October, 2006, the SEC says. Between Oct. 18 and Dec. 19, 2006, Playstar allegedly arranged for 39.6 million shares to be transferred to two accounts controlled by Mr. D'Amaro. At the company's direction, these shares had no restrictive legends, meaning they could be freely traded, the complaint states.
Starting on Oct. 19, 2006, Mr. Dynkowski allegedly used these shares to dramatically increase the company's price by arranging wash sales and matched orders that accounted for millions of shares in volume. At the same time, Mr. D'Amaro had Playstar's chief executive officer issue numerous misleading news releases touting the company, the SEC says. The stock subsequently rose from half a penny on Oct. 18, 2006, the day before the alleged pump started, to 12 cents by Nov. 9, 2006.
As the stock rose, Mr. Dynkowski and Mr. D'Amaro allegedly started selling shares from the nominee accounts. The SEC says that in total, they sold 39.6 million shares of Playstar for a profit of $1.18-million, which they divided between themselves and Playstar or its representatives. The complaint does not make specific allegations against anybody at Playstar, nor does it identify who at the company provided Mr. Dynkowski and Mr. D'Amaro with the shares.
The SEC claims that during the pump-and-dump, Playstar issued a news release designed to mislead shareholders into believing that naked short-sellers were responsible for massive selling of the stock. The news release stated that the company had ordered a list of non-objecting beneficial owners from its transfer agent. "In reality, the alleged naked short selling was actually Dynkowski dumping the shares he had received from Playstar," the complaint states.
The SEC says the largest of the three pump-and-dumps was Asia Global Holdings, which purported to have the rights to the show "Who Wants to be a Millionaire" in China. According to the complaint, the men made $4.05-million dumping Asia Global. Mr. Dynkowski and Mr. Brown allegedly dumped the shares using nominee accounts opened by Mr. Mangiapane and Mr. Riviella, who used their positions as registered representatives at California brokerage AIS Financial Inc. for the scheme.
According to the complaint, the manipulative trades helped boost the stock from 11.5 cents on Aug. 9, 2006, to a high of 41 cents on Aug. 25, 2006. While Mr. Dynkowski and Mr. Brown were selling shares from nominee accounts, they had the company issue a news release touting its second quarter 2006 results, the SEC claims. "Dynkowski told Brown to 'make it sound good ... like AAGH [Asia Global] announces record revenue net profits [sic]' and suggested that the press release state that the company's profits had increased by at least 300%," the complaint reads. The company then issued a news release claiming that its second quarter net income rose 370 per cent, the SEC notes.
The SEC is seeking injunctions preventing future violations of the U.S. Securities Act, appropriate civil penalties and disgorgement, as well as permanent penny stock bans against Mr. Dynkowski, Mr. Brown, Mr. Canceli, Mr. D'Amaro and Mr. Rosengard.
The seven men that were named in the criminal case face varying sentences, should they be found guilty. Mr. Dynkowski and Mr. Mangiapane have the longest potential sentence. They are charged with nine counts of fraud, each of which carries a maximum penalty of 20 years in jail and a fine of up to $5-million.
In a statement issued Thursday, the U.S. Attorney's Office in Delaware said that law enforcement had been investigating the case since 2007. The agencies involved included the Department of Homeland Security, the Internal Revenue Service and the Delaware State Police.
Reader Comments - Comments are open and unmoderated, although libelous remarks may be deleted. Opinions expressed do not necessarily reflect the views of Stockwatch.
Allow me to introduce myself, my name is Matt Brown, me and my market maker buddies (the infamous Janice Shell included) run a website called Investors Hub which we use to manipulate penny stocks long or short. As moderators we have complete editing power over the boards, so thing have always worked out in our favor. $6.2 million can buy a lot of lawyers, so we aren't worried about the SEC. Remember, if you post in iHub you better be with us, otherwise I will make your posts go away!
Posted by Matt Brown @ 2009-05-22 14:33
Litigation is nothing new to Ihub and friends:
"San Francisco-based press release distributor BusinessWire announced late Monday that it has filed a federal court lawsuit against Jeffrey Mitchell, William Ulrich and Janice Shell after they posted an April Fools press release through its service. The company alleges violations of federal and state trademark laws, fraud, breach of contract, defamation and conspiracy and seeks unspecified damages and injunctive relief.
Posted by Janice Shell @ 2009-05-22 14:55
Mafia money may have been involved. Here is the 2007 story about Pawel Dynkowski
""The money-laundering case is suspected to have ties to the Genovese crime family in New York.""
""After money was recovered in Texas, authorities in Delaware made one major arrest in the case. Pawel Dynkowski, 21, of Newark, Del., was arrested Feb. 10 on suspicion of laundering money, and more search warrants were issued the following day, Luciano said.""
Troopers aid in scam case By Jayna Boyle Saturday, February 17, 2007
Texas Department of Public Safety troopers in San Angelo helped make major breaks in a nationwide money-laundering investigation and recovered more than $150,000 recently.
Working with the Sutton County Sheriff’s Department and the DPS Texas Highway Patrol Division, San Angelo DPS Narcotics Service officers intercepted $155,300 in cash on Feb. 8 that was being shipped through the Concho Valley, said Sgt. Vince Luciano with San Angelo DPS Narcotics. The money was coming from California on its way to Delaware.
The money laundering scam is known as a “pump and dump” stock market scheme in which the culprit pumps up the values of stock on a fictitious company to draw in investors.
The manner in which the money was seized cannot be revealed because it is part of an ongoing investigation, Luciano said. One man — a Florida resident — who had the money was arrested, but authorities cannot release his name because the investigation is ongoing.
Authorities have been investigating the case for about nine months, Luciano said. Police officials do not know how long the money scam has been going on, he said, but some estimate at least seven years.
Luciano said authorities have not identified all the artificial companies involved in the operation. He said the companies have been posing as Internet-based businesses.
Because most of the money laundering occurs through online trading, Luciano said, most people do not realize that they have been victims, and authorities do not know how many people have been victims of the fraud.
It is yet to be determined whether money was regularly brought through Texas, Luciano said. The money-laundering case is suspected to have ties to the Genovese crime family in New York.
After money was recovered in Texas, authorities in Delaware made one major arrest in the case. Pawel Dynkowski, 21, of Newark, Del., was arrested Feb. 10 on suspicion of laundering money, and more search warrants were issued the following day, Luciano said.
In the Delaware arrest and search warrants, police recovered $109,642 in cash and five vehicles totaling $440,000 in value and suspected of being purchased with laundered money.
Authorities are looking for at least five others regarding the money-laundering scam, Luciano said.
Other law enforcement agencies involved in the investigation include the Delaware State Police; the Orange County, Calif., organized crime unit; and U.S. Immigration and Customs Enforcement.
Luciano said to avoid becoming a victim of a “pump and dump” stock market scam, research the companies in which you plan to invest, and do not do all the research online.
If you suspect that you have invested in a fraudulent company, contact the U.S. Securities and Exchange Commission.
Posted by WayToGoMattBrowneAndIHUB @ 2009-05-22 15:50
l enjoyed the last line 'if you suspect you have invested in a fraudulent company ,contact the U>S> securitiesAND EXCHANGE COMMISSION.WELL IN CANANADA IT CALLED PLACING YOURE BET WITH THE PENNY STOCK COMPANY THAT IS ABLE TO RAISE THE MOST CAPITAL AND HAVE THE BEST STORY,THEN HOLD YOUR BREATH,SOME BECOME THE REAL DEAL THATS WHAT THE GAMBLE IS ALL ABOUT,THREE CHEERS FOR THE RISK TAKERS ON THE VENTURE EXCHANGE AFTER DOING THERE OWN DUE DIILIGENCE,the kakunda
Posted by KAKUNDA @ 2009-05-22 16:28
KAKUNDA, are you suggesting outright fraud by low life scumbag penny stock criminals is normal business in the stock market and all risk lies with investors? What do you think about operators of penny stock tout websites being in on these scams? Ihub is the worst when it comes to so called "moderators" manipulating message boards to serve their own agendas.
Ihub is a disgrace to the entire securities industry. It should be shut down and the crooked operators sent to prison for 20 years.
Posted by IHUB CRIMINALS @ 2009-05-22 17:01
