Additional Charges and Convictions in Kickback Schemes
On August 13, 2013, John Jordan, former chief executive of Vida Life International Ltd., a public company that trades on the OTCMarkets OTCQB as VILF, was sentenced to 30 months in federal prison for conspiracy to commit securities fraud, wire fraud and mail fraud. The Securities and Exchange Commission (“SEC”), which conducted a parallel investigation alongside the FBI undercover operation, assisted in bringing these charges and similar ones against 10 other defendants who participated in the scheme, which involved offering kickbacks to individuals who turned out to be undercover FBI agents.
Six of the defendants have already pled guilty to charges arising from the roles they played in the scams in question. Jordan was prosecuted for offering a kickback to a purported investment fund manager.
In exchange for the kickback, the “fund representative” agreed to cause an investment fund under his control to purchase stock in Jordan’s public company, Vida Life. To conceal the scheme, Jordan used a sham consulting agreement and other fraudulent documents.
Jordan’s conviction and sentence followed a year-long FBI investigation focusing on fraud in the penny stock markets. Accurate information about microcap stocks is difficult for the average investor to find, since many microcap companies do not file public information with the SEC. Even when they do make public disclosures, the information provided is often incomplete, inaccurate or fraudulent.
Two other defendants who were charged in the kickback scheme were previously sentenced. Steven Berman, 50, of Ohio, the former chief executive Officer of China Wi-Max Communications, Inc., and Richard Kranitz, 69, a Wisconsin securities attorney, were each sentenced to 18 months after pleading guilty to conspiracy to commit securities fraud.
Two other defendants in the kickback scheme are scheduled to be sentenced. Karen Person pled guilty to conspiracy to commit securities fraud and will be sentenced on August 16. James Prange, who was convicted after trial on multiple counts of conspiracy to commit securities fraud and wire fraud, is scheduled to be sentenced on September 25, 2013.
For further information about this securities law blog post, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton, Florida, (561) 416-8956, by email at [email protected] or visit www.securitieslawyer101.com. This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute, legal and compliance advice on any specific matter, nor does this message create an attorney-client relationship. Please note that the prior results discussed herein do not guarantee similar outcomes.
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Brenda Hamilton, Securities Attorney
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