According to the court filings, between 2008 and 2013, Winick was the leader of two multi-million dollar fraud schemes that used call centers around the world to defraud unsuspecting investors. In the first scheme, Winick, together with other defendants, was charged with engaging in an international “pump and dump” operation of multiple shell companies after reverse merger transactions. Specifically, Winick and his co-defendants secretly controlled the shells and fraudulently inflated their share price using false and misleading press releases and manipulative trading and then sold billions of the fraudulently-inflated shares to investors.
The penny stocks pumped were Mass Petroleum Inc. (MAST) of Vancouver; Blackout Media Corp. (BKMP) of Ontario; Resource Group International Inc. (RSGR) of Arizona; Liquid Gold International Corp. (FOYJ, after it was acquired by another company) of Indiana; iMusic Worldwide Inc. (IMWL) of Washington State; WGI Holdings Inc. (WGIH) of Delaware; Talisman holdings Inc. (TMHO) of Colorado; Nikron Technologies Inc. (NKRN) of Kansas; Tal-Cap Inc. (TALC) of Minnesota; RainEarth Inc. (RNER) of Beijing; and Sync2 Networks Corp. (SYNW) of Nevada.
In the second scheme, Winick, together with other defendants, was charged with operating boiler rooms in four countries to induce investments in penny stocks, including investments by many of the victims in the first scheme, to pay advance fees that the defendants promised would enable them to sell the stocks and recover any losses they incurred.
In reality, Winick and his co-defendants stole more than $5 million from the duped investors and never provided any services. Winick established and operated boiler rooms or call centers in various locations around the world, including Canada, Thailand, and China, to solicit fees from the victims. Winick also planned to open a call center in Brooklyn.
The Winick case demonstrates the ongoing failure of the government to address the significant investor harmed caused by shell purveyors creating reverse merger inventory easily obtainable by fraudsters like Sandy Winick. Reverse mergers allow companies to avoid the disclosure obligations and other requirements applicable to companies filing registration statements with the Securities and Exchange Commission.
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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