Secret Owner of Offshore Brokerage Firm Arrested f
Post# of 4611
Posted On: 06/24/2015 1:47:35 PM
Secret Owner of Offshore Brokerage Firm Arrested for Alleged Leadership Role in a $300 Million Securities Fraud and Money Laundering Scheme
Defendant Charged with Participating in Numerous Market Manipulation Schemes, Including the Manipulation of Cynk Technology Corp (CYNK)
U.S. Attorney’s Office
June 23, 2015
Eastern District of New York
(718) 254-7000
Gregg R. Mulholland, a dual U.S. and Canadian citizen, was arrested at Phoenix International Airport earlier today during a layover of his flight from Canada to Mexico on charges of securities fraud conspiracy and money laundering conspiracy for fraudulently manipulating the stocks of numerous U.S. publicly-traded companies and then laundering approximately $300 million in profits through at least five offshore law firms. Mulholland was the secret owner of Legacy Global Markets S.A. (Legacy), an offshore broker-dealer and investment management company based in Panama City, Panama and Belize City, Belize, which was indicted in September 2014 (United States v. Bandfield, et al., 14-CR-476 (ILG)). The defendant’s initial appearance for removal proceedings to the Eastern District of New York is scheduled for tomorrow before United States Magistrate Judge Eileen Willett at the Sandra Day O’Connor United States Courthouse in Phoenix, Arizona.
The charges were announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York, and Diego Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); Shantelle P. Kitchen, Special Agent-in-Charge, United States Internal Revenue Service, Criminal Investigation, New York (IRS-CI); and Raymond R. Parmer Jr., Special Agent-in-Charge, Department of Homeland Security, Homeland Security Investigations, New York (HSI).
“As charged in the criminal complaint, Mulholland used an elaborate offshore corporate structure built on lies and deceit to defraud U.S. investors in publicly-traded companies and profited to the tune of $300 million. He concealed his leadership role in this fraudulent network, which included stock promoters, lawyers, and broker-dealers, by using aliases and sham companies, and fled the United States when his secretly-owned brokerage firm was indicted last summer,” stated Acting United States Attorney Currie. “We are committed to closing fraudulent offshore safe havens and prosecuting those who seek to abuse the financial markets to enrich themselves.” Mr. Currie thanked the Securities and Exchange Commission and the Justice Department’s Office of International Affairs for their cooperation and assistance in the investigation.
“Mulholland’s alleged sophisticated scheme for ill-gotten gains included everything from lies, fraud, and offshore firms. It all caught up with him today when he was arrested and charged with securities fraud conspiracy and money laundering conspiracy. The FBI will continue to work with our partners to police our markets and ensure they are legal, fair, and equitable,” stated FBI Assistant Director-in-Charge Rodriguez.
“The use of overseas accounts and other offshore mechanisms to conceal income and assets is obviously of great interest to the Internal Revenue Service,” stated IRS-CI Special Agent-in-Charge Kitchen. “Investment fraud schemes that incorporate these means to hide proceeds ultimately make the Internal Revenue Service an unwitting, additional victim. In response, IRS-Criminal Investigation, working with our law enforcement partners, will follow the global financial trail to unravel such crimes.”
“Mulholland’s arrest puts an end to an alleged money laundering and security fraud scheme that was motivated by greed,” said HSI New Special Agent in Charge Parmer. “HSI will work with our law enforcement partners and use every tool at our disposal to combat financial crimes that cost tax payers millions of dollars.”
According to the complaint unsealed this morning in Brooklyn federal court, between 2010 and 2014, Mulholland controlled a group of individuals (the Mulholland Group) who together devised three interrelated schemes to: (a) induce U.S. investors to purchase stock in various thinly-traded U.S. public companies through fraudulent promotion of the stock, concealment of their ownership interests in the companies, and fraudulent manipulation of artificial price movements and trading volume in the stocks of those companies; (b) circumvent the IRS’s reporting requirements under the Foreign Account Tax Compliance Act (FATCA); and (c) launder the fraudulent proceeds from the stock manipulation schemes to and from the United States through five offshore law firms. Through this scheme, the Mulholland Group laundered approximately $300 million in fraudulent proceeds.
To facilitate these interrelated schemes, the complaint charges that the Mulholland Group used shell companies in Belize and Nevis, West Indies, which had nominees at the helm. This structure was designed to conceal the Mulholland Group’s ownership interest in the stock of U.S. public companies, in violation of U.S. securities laws, and enabled the Mulholland Group to engage in numerous “pump and dump” schemes. This structure enabled the Mulholland Group to manipulate the stock of Cynk Technology Corp, which traded on the U.S. OTC markets under the ticker symbol CYNK. Using aliases such as “Stamps” and “Charlie Wolf,” Mulholland was intercepted on a court-authorized wiretap in May 15, 2014, admitting to his ownership of “all the free trading” or unrestricted shares of CYNK. Prior to this May 15, 2014 conversation between Mulholland and his trader at Legacy, there had been no trading in CYNK stock for 24 trading days. Over the next two months, the stock of CYNK rose from $0.06 per share to $13.90 per share, a more than $4 billion stock market valuation for a company that had no revenue and no assets.
Mulholland used the services of a U.S.-based lawyer to launder the $300 million generated through his stock manipulation of CYNK and other U.S. companies—directing the fraud proceeds to five law firm accounts and transmitting them back to members of the Mulholland Group and its co-conspirators. These concealment schemes enabled Mulholland to evade reporting requirements to the IRS.
The charges in the complaint are merely allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted, Mulholland faces a maximum sentence of 20 years’ imprisonment.
The government’s case is being prosecuted by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys Jacquelyn Kasulis and Winston Paes are in charge of the prosecution. Assistant United States Attorney Brian Morris of the Office’s Civil Division will be responsible for the forfeiture of assets.
The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
The Defendant:
GREGG R. MULHOLLAND
Age: 45
San Juan Capistrano, California
Vancouver, Canada
https://www.fbi.gov/newyork/press-releases/20...ing-scheme
Defendant Charged with Participating in Numerous Market Manipulation Schemes, Including the Manipulation of Cynk Technology Corp (CYNK)
U.S. Attorney’s Office
June 23, 2015
Eastern District of New York
(718) 254-7000
Gregg R. Mulholland, a dual U.S. and Canadian citizen, was arrested at Phoenix International Airport earlier today during a layover of his flight from Canada to Mexico on charges of securities fraud conspiracy and money laundering conspiracy for fraudulently manipulating the stocks of numerous U.S. publicly-traded companies and then laundering approximately $300 million in profits through at least five offshore law firms. Mulholland was the secret owner of Legacy Global Markets S.A. (Legacy), an offshore broker-dealer and investment management company based in Panama City, Panama and Belize City, Belize, which was indicted in September 2014 (United States v. Bandfield, et al., 14-CR-476 (ILG)). The defendant’s initial appearance for removal proceedings to the Eastern District of New York is scheduled for tomorrow before United States Magistrate Judge Eileen Willett at the Sandra Day O’Connor United States Courthouse in Phoenix, Arizona.
The charges were announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York, and Diego Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); Shantelle P. Kitchen, Special Agent-in-Charge, United States Internal Revenue Service, Criminal Investigation, New York (IRS-CI); and Raymond R. Parmer Jr., Special Agent-in-Charge, Department of Homeland Security, Homeland Security Investigations, New York (HSI).
“As charged in the criminal complaint, Mulholland used an elaborate offshore corporate structure built on lies and deceit to defraud U.S. investors in publicly-traded companies and profited to the tune of $300 million. He concealed his leadership role in this fraudulent network, which included stock promoters, lawyers, and broker-dealers, by using aliases and sham companies, and fled the United States when his secretly-owned brokerage firm was indicted last summer,” stated Acting United States Attorney Currie. “We are committed to closing fraudulent offshore safe havens and prosecuting those who seek to abuse the financial markets to enrich themselves.” Mr. Currie thanked the Securities and Exchange Commission and the Justice Department’s Office of International Affairs for their cooperation and assistance in the investigation.
“Mulholland’s alleged sophisticated scheme for ill-gotten gains included everything from lies, fraud, and offshore firms. It all caught up with him today when he was arrested and charged with securities fraud conspiracy and money laundering conspiracy. The FBI will continue to work with our partners to police our markets and ensure they are legal, fair, and equitable,” stated FBI Assistant Director-in-Charge Rodriguez.
“The use of overseas accounts and other offshore mechanisms to conceal income and assets is obviously of great interest to the Internal Revenue Service,” stated IRS-CI Special Agent-in-Charge Kitchen. “Investment fraud schemes that incorporate these means to hide proceeds ultimately make the Internal Revenue Service an unwitting, additional victim. In response, IRS-Criminal Investigation, working with our law enforcement partners, will follow the global financial trail to unravel such crimes.”
“Mulholland’s arrest puts an end to an alleged money laundering and security fraud scheme that was motivated by greed,” said HSI New Special Agent in Charge Parmer. “HSI will work with our law enforcement partners and use every tool at our disposal to combat financial crimes that cost tax payers millions of dollars.”
According to the complaint unsealed this morning in Brooklyn federal court, between 2010 and 2014, Mulholland controlled a group of individuals (the Mulholland Group) who together devised three interrelated schemes to: (a) induce U.S. investors to purchase stock in various thinly-traded U.S. public companies through fraudulent promotion of the stock, concealment of their ownership interests in the companies, and fraudulent manipulation of artificial price movements and trading volume in the stocks of those companies; (b) circumvent the IRS’s reporting requirements under the Foreign Account Tax Compliance Act (FATCA); and (c) launder the fraudulent proceeds from the stock manipulation schemes to and from the United States through five offshore law firms. Through this scheme, the Mulholland Group laundered approximately $300 million in fraudulent proceeds.
To facilitate these interrelated schemes, the complaint charges that the Mulholland Group used shell companies in Belize and Nevis, West Indies, which had nominees at the helm. This structure was designed to conceal the Mulholland Group’s ownership interest in the stock of U.S. public companies, in violation of U.S. securities laws, and enabled the Mulholland Group to engage in numerous “pump and dump” schemes. This structure enabled the Mulholland Group to manipulate the stock of Cynk Technology Corp, which traded on the U.S. OTC markets under the ticker symbol CYNK. Using aliases such as “Stamps” and “Charlie Wolf,” Mulholland was intercepted on a court-authorized wiretap in May 15, 2014, admitting to his ownership of “all the free trading” or unrestricted shares of CYNK. Prior to this May 15, 2014 conversation between Mulholland and his trader at Legacy, there had been no trading in CYNK stock for 24 trading days. Over the next two months, the stock of CYNK rose from $0.06 per share to $13.90 per share, a more than $4 billion stock market valuation for a company that had no revenue and no assets.
Mulholland used the services of a U.S.-based lawyer to launder the $300 million generated through his stock manipulation of CYNK and other U.S. companies—directing the fraud proceeds to five law firm accounts and transmitting them back to members of the Mulholland Group and its co-conspirators. These concealment schemes enabled Mulholland to evade reporting requirements to the IRS.
The charges in the complaint are merely allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted, Mulholland faces a maximum sentence of 20 years’ imprisonment.
The government’s case is being prosecuted by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys Jacquelyn Kasulis and Winston Paes are in charge of the prosecution. Assistant United States Attorney Brian Morris of the Office’s Civil Division will be responsible for the forfeiture of assets.
The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
The Defendant:
GREGG R. MULHOLLAND
Age: 45
San Juan Capistrano, California
Vancouver, Canada
https://www.fbi.gov/newyork/press-releases/20...ing-scheme
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