Delray resident Fischler indicted for securities fraud

By Palm Beach Business.com

WEST PALM BEACH — A federal grand jury has indicted two Palm Beach men, including a Delray Beach resident, on charges of conspiracy to commit securities fraud for manipulating the stocks of four small publicly traded companies.

Joshua Konigsberg, 49, of Palm Beach Gardens and Louis Fischler, 52, of Delray Beach each face a maximum of five years in prison if convicted.

The two men are charged with attempting to pay kickbacks to investment professionals, including a stockbroker and a pension fund, to get them to buy worthless or overvalued shares of stock for their clients.

According to court documents,  Konigsberg and Fischler tried to entice a pension fund manager into buying the restricted shares of stock of MediSys Corp. and Casino Management of America by paying him kickbacks disguised as consulting fees. Restricted shares can’t be traded publicly.

Similarly, Konigsberg and Fischler paid bribes to a stockbroker to get him to use his clients' accounts to buy publicly traded shares of  Pavillion Energy Resources Inc. and Xtreme Motorsports International Inc. The fraudulent buying would create the false impression in the market that these companies were developing active trading supporting a rising stock price.

Unfortunately for Konisberg and Fischler, both the pension fund manager and the stockbroker were undercover FBI agents.

The indictments are part of a national effort by federal authorities, including the Securities and Exchange Commission, against penny stock fraud.

Said U.S. Attorney Wifredo A. Ferrer: “This case demonstrates the risks associated with thinly traded microcap companies. The defendants charged today abused their knowledge of the capital markets hoping to misappropriate money held in investment accounts to enrich themselves and their coconspirators.”