subscribe: Posts | Comments

Venice Man Among 14 Arrested for Alleged Stock Market Manipulation

Comments Off on Venice Man Among 14 Arrested for Alleged Stock Market Manipulation

By Paul Chavez, Venice Dispatch

A 40-year-old Venice man was among 14 people arrested after a federal grand jury returned two indictments alleging the defendants participated in long-term, international schemes to manipulate stock prices that defrauded 20,000 investors and generated more than $30 million in illegal profits, authorities said Thursday.

The grand jury indictments were unsealed Wednesday and 14 of the 15 defendants were arrested, including Venice resident Ari Kaplan and his 63-year-old uncle, Sherman Mazur, of the Westwood area, according to a press release from the U.S. Attorney’s Office in Los Angeles. Mazur and Kaplan in one indictment were accused of leading a scheme involving seven other defendants in which they fraudulently inflated stock prices and trading volumes of public stock and then sold millions of shares at the falsely inflated profits.

“The defendants’ alleged combination of celebrities, press releases, gimmicks, and lies was similar to a how a magician deceives unsuspecting believers into an illusion,” said Bill Lewis, assistant director in charge of the FBI’s Los Angeles field office. “While operating the schemes alleged in the indictments, the defendants kept their audience captive until stock prices peaked, while investor money vanished into defendants bank accounts.”

The arrests were made under indictments that were the result of ongoing investigations by the FBI and the Internal Revenue Service-Criminal Investigation. The investigation involved wiretaps that intercepted more than 60,000 phone calls and 24,000 text messaages.

The 32-count Mazur indictment focused on two businesses: GenMed, which purported to manufacture and distribute generic drugs, and Biostem, a company purportedly developing regenerative stem cell treatment, including hair regrowth technology.

The indictment alleges that Mazur orchestrated a so-called “pump and dump” market manipulation maneuver that typically involves three components:
1. Perpetrators obtaining and concealing control of the stock
2. Inflation of the stock price by trading back and forth among the schemers at increasingly higher prices and also the launch of a promotion campaign that includes false press releases, celebrity endorsements and paying stock promoters and analysts to recommend the stock.
3. Coordinated selling by the perpetrators to maximize fraudulent profits, leaving other investors holding shares worth substantially less.

The indictment describes a March 22, 20122 conversation between Mazur and co-defendant Colin Nix, 39, of the Los Feliz area about a celebrity identified as “Actor A” who recorded a video news release to promote GenMed. The reference was to actor Eric Roberts, best known for his roles in “The Pope of Greenwich Village” (1984), “Runaway Train” (1985) and more recently for playing mobster Sal Maroni in the 2008 Batman movie “The Dark Knight.” Roberts, 56, also is the brother of actress Julia Roberts and the father of actress Emma Roberts.

Roberts spoke about GenMed on KCAL-TV Channel 9 in Los Angeles and also during an interview with former NBA and Lakers players John Salley on the cable show “Game On with John Salley.”

The second indictment, which includes Nix among the 11 defendants, involved alleged manipulation of FrogAds stock that included boosting its profile by employing an unidentified actress. The court documents are in reference to Pamela Anderson, the buxom actress best known for her role in the television series “Baywatch.” 

Neither Roberts nor Anderson were charged with wrongdoing.

The indictment also includes a March 23, 2011, conversation in which Mazur and Nix speak about the disparity between stock target prices for GenMed set by two unidentified stock promoters who were paid to recommend buying it.

The defendants were described in court documents as serial market manipulators who ran several stock market manipulation schemes each year that generated several million dollars. One of the defendants in a wiretapped call described the deal by saying: “There’s nothing in there, there’s nothing to the company. It’s monkey business.”

The indictment alleges the conspirators bought and transferred shares to offshore accounts with names such as “Dojo,” “Picasso” and “Big Dog” and co-opted company management and other investors in order to pull of the fraud. The indictment alleges that members of the scheme generated at least $13 million in illegal proceeds.

“This investigation took law enforcement above and beyond its traditional role in financial crimes,” said N. Dawn Mertz, Special Agent in Charge of IRS-Criminal Investigation’s Los Angeles Field Office, in a statement. “Using foreign bank accounts to promote their scheme, the case put us square in the middle of the world of international banking and the sophisticated electronic movement of money. IRS Criminal Investigation is proud to bring our accounting skills to this joint venture and to put a stop to this and other types of white-collar fraud.”

  • The defendants in the Mazur indictment include:
  • Mazur, 63, of the Westwood area, who allegedly controlled a company called the London Kaplan, 40 of Venice, who is Mazur’s nephew and was his partner in the London Finance Group, as well as in a series of other business endeavors
  • Nix, 3 9, of the Los Feliz district of Los Angeles, who controlled the Santa Monica-based Calbridge Capital LLC, which purported to be a “boutique investment banking firm”
  • Regis Possino, 65, of the Pacific Palisades district of Los Angeles, a now-disbarred attorney who was Nix’s partner at Calbridge Capital
  • Edon Moyal, 32, of Carlsbad, California, who controlled a company called 8 Sounds, Inc. and while allegedly involved in this scheme was free on bond pending trial in a criminal case filed in federal court in San Diego
  • Mark Harris, 56, of Scottsdale, Arizona, a stock promoter who controlled Apache Capital LLC, an investor relations firm in Scottsdale
  • Joey Davis, 46, of the Los Feliz district of Los Angeles, who controlled Scripted Consulting Group, a public relations firm in Los Angeles and who was allegedly involved in this scheme while free on bond pending trial in a criminal case filed in federal court in Los Angeles
  • Curtis Platt, 51, of Sarasota, Florida, who controlled Big Dog International LLC
  • Dwight Brunoehler, 62, of Maitland, Florida, who is the CEO of Biostem, a company based in Clearwater, Fla.

The second indictment concerns a stock manipulation ring allegedly headed by Possino, a former Los Angeles County deputy deputy district attorney, and also includes Nix. The indictment outlines a broad scheme to manipulate the stock prices of Sport Endurance Inc., an energy drink maker; Imobolis Inc., an online bulletin board company that later became FrogAds, and Empire Post Media, which purported to be a post-production service for feature films and television programs. The indictment alleges that members of the conspiracy made at least $18 million in illegal proceeds.

The 37-count Possino indictment includes defendant Tarun Mendiratta, 42, of Weston, Conn., who claimed to earn between $75 and $80 million in market manipulation schemes over the past decade, according to the new release. Mendiratta allegedly participated in the Possino scheme, in part, by using a cell phone smuggled into the prison where he was housed.

Another defendant, Ivano Angelastri, 49, a resident of Switzerland and Dubai, was the only one not arrested Wednesday and is being sought by authorities.

Mazur and Possino were scheduled to have detention hearings next week in U.S. District Court with trial dates of April 9 scheduled for both in federal court in Los Angeles.

If convicted, each of the defendants would face statutory maximum penalties of at least 100 years in federal prison. Some of the defendants, including Mazur, Possino, Nix, and Mendiratta face potential life sentences.

Creative Commons License
This work is licensed under a Creative Commons Attribution-NoDerivs 3.0 Unported License

Check out Venice Dispatch on Facebook, Google+ and also on Twitter.


Comments are closed.