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Federal crackdown on securities fraud nets 15
By Palm Beach Business.com
FORT LAUDERDALE — The latest round of a federal crackdown on investment fraud has netted 15 penny stock executives and shareholders on charges ranging from bribery to wire fraud stemming from attempts to illegally boost share price, authorities announced Monday.
“The fraud from these stock market manipulation schemes could have defrauded numerous innocent investors out of millions of dollars,” FBI Special Agent John V. Gillies said.
According to various court records, charges against the 15 involve various attempts to bribe others into buying shares of their companies in order to boost both their trading volume and share price. In some cases, it was a stockbroker who had control of customers’ discretionary accounts. In others, it involved a pension fund manager.
In both schemes, the 15 attempted to cover up the payments by disguising them as consultant fees.
The defendants and their companies are from all over the country, including South Florida. Those charged are:
— Douglas D. Hague, 65 of Boca Raton and president of Clean Coal Technologies Inc., which claimed to be able to burn low-grade coal with minimal emissions through a technology it called the “pristine promise.”
Hague, according to the FBI, tried to bribe a pension fund manager into buying restricted Clean Coal stock with fund money.
—Joseph J. Repko, 63 of Hobe Sound and Michael M. Cimino, 59 of Philadelphia. Both men were executives with Sure Trace Security Corp., a company that claimed to be marketing an anti-counterfeiting technology. Both men are charged with bribing a pension fund manager to buy Sure Trace shares at inflated prices.
In 2007, the SEC sued Cimino and Sure Trace for lying about company revenue and for attempting to skirt securities registration laws.
— Ryan F. Coblin, 41, of Boca Raton and CEO of Delivery Technology Solution of Boca Raton. Delivery Technology Solutions is the owner of Universal Delivery, a catering company based in Boca Raton. Coblin already had pleaded guilty to bribing a pension fund manager.
— Robert L. Cotton, 61, charged with manipulating the stock of Cotton & Western Mining Inc. The Houston based company is an iron ore mining company.
— Harold Steven Bonenberger, 56, CEO of Angel Acquisition Corp., a real estate company and mortgage brokerage based in Carson City, Nev., and Carlsbad, Calif. Bonenberger is charged with manipulating the stock of his firm.
In 2008, Angel was one of four companies the SEC accused of distributing billions of shares of unregistered stock to the public by disguising the shares as employee stock options.
— Matthew A. Connor, a 36-year-old Amherst, Va., resident and consultant with KCM Holding Corp. He is accused of wire fraud.
— Kevin P. Brennan, 62 of Pittsburgh, Donald G. Huggins, 64 of St. Petersburg and Marc S. Page, 50 of Tiburon, Calif. All are charged with manipulating the stock of Optimized Transportation Management.
— Scott A. Haire, 42, of Coral Springs and former president of Wound Management Technologies. Wound Management, based in Fort Worth, marketed a wound care product called cellerate. Haire faces charges that he attempted to manipulate the stock price and trading volume of Wound Management. He is expected to surrender to authorities on Wednesday.
—Yan K. Skwara, former CEO of US Farms of Irvine, Calif. Skwara has pleaded guilty to allegations that he bribed a pension fund manager. He is scheduled to be sentenced next month.
Since its inception in December 2010, the enforcement initiative against investment fraud has resulted in charges against 85 defendants in South Florida and court orders for more than $1.5 billion in restitution.
