SEC Charges Ubong Uboh and Tyler Crockett for Using a Call Room to Manipulate Stocks
On April 20, 2021, the Securities and Exchange Commission (the “SEC”) filed charges against Ubong Uboh and Tyler Crockett for soliciting investors to purchase shares of several microcap issuers from a call room in Miami, Florida.
According to the SEC Complaint, from approximately 2016 through 2018, Uboh and Crockett used fictitious names and backgrounds and made material misrepresentations to investors about, among other things, the Issuer’s relationships with well-known financial institutions and their future prospects.
After being solicited by the Defendants, retail investors, many of whom were senior citizens, purchased the Issuers’ stock. The investors have realized and unrealized losses totaling at least $1.1 million.
Uboh was previously charged by the United States Attorney’s Office on March 13, 2013 for wire fraud and conspiracy to commit wire fraud in connection with a timeshare scheme. Uboh pleaded guilty to the charges and was sentenced to 36 months in prison, followed by 3 years of supervised release, and was ordered to pay $293,101 in restitution. On January 4, 2019, Uboh was sentenced to an additional 7 months in prison for violating his parole.
The SEC Complaint against Uboh and Crockett stems from an earlier emergency injunction brought against Garrett O’Rourke and Michael J Black on July 18, 2019. O’Rourke allegedly resided in and managed the Call Room in Miami, Florida. That SEC Complaint named AV1 Group Inc (AVOP), which now trades as Omid Holdings Inc (OMID), in addition to ETII and CYBF from the current SEC action.
According to that earlier complaint, O’Rourke was part of a control group that owned a vast majority of the Issuers’ free trading stock that, after Uboh and Crockett and others persuaded investors to purchase the shares of the Issuers, dumped millions of dollars worth of these shares.
The SEC further alleged that:
- Michael J Black was the founder of EnvironTechnologies Inc (ETII), secretly controlled the ETII float, and he and O’Rouke used various offshore entities to sell the stock while O’Rourke and the call center solicited investors to buy the stock;
- Black controlled AVOP’s float and sold stock while O’Rourke and the call center solicited investors to buy the stock;
- O’Rourke and the call center solicited investors to buy CYBF stock using misrepresentations.
O’Rourke and Crocket are unnamed co-conspirators in an Indictment filed against Ubong Uboh last month, on March 21, 2021, that was unsealed this week for the manipulation of CYBF, ETII, ETKR, and LSRV.
On the same day that the SEC filed its emergency action against O’Rourke and Black, July 18, 2019, a criminal complaint was filed against O’Rourke and Black. Early on, Michael J Black’s name was blacked out of the Indictment – a sign that he was cooperating.
One week later, on July 26, 2019, the SEC suspended trading in Biohemp International Inc. (BKIT), a company closely linked to Cyberfort Software, Inc (CYBF) through common insiders and tied to Micheal J Black.
That same month, the SEC also suspended trading in several other stocks (ANVV, NHEL, KOVR, CBDC, BFTI, BEAG, UPPR) that used boiler room promoters and offshore entities to sell stock into the public.
The BKIT suspension was eventually followed by a criminal complaint on January 2, 2020 filed in Manhattan federal court charging Ulrik Debo and Kenneth Ciapala with orchestrating a stock manipulation scheme on multiple publicly traded stocks between 2013 and December 2019. BKIT was referenced as Company #2 of 5 profiled in the Indictment. Other issuers referenced included EMS Find, Inc. (EMSF), which is now Integrated Ventures Inc (INTV), and EV Transportation (EVTP).
The SEC also filed several related complaints during this time.
On January 2, 2020, the SEC charged Steve Bajic, Rajesh Taneja, Ciapala, Anthony Killarney, Christopher Lee McKnight, Andrew Dale Wise, and a number of nominee companies controlled by them with enabling public company control persons to fraudulently sell stock to retail investors in the U.S. over-the-counter securities market.
A second complaint filed by the SEC that day targeted Ciapala and his company Blacklight SA, which has its headquarters in Switzerland.
And on January 3, 2020, the SEC filed a suit against Ulrik Debo.
According to the agency, altogether, the group’s schemes involved at least 45 microcap companies and generated more than $35 million in illegal stock sales from 2013 through 2019. Unfortunately, the complaints and the indictment don’t list all of the companies involved, but they offer detailed descriptions of the dubious services offered by the perpetrators and of how the schemes themselves worked.
We wrote about many of those details in a report we published back in January of 2020 following the SEC actions.
Those same issuers were also mentioned in a Criminal Complaint and subsequent SEC Complaint filed against Roger Knox on October 2, 2018 for running an offshore money-laundering scheme that helped individuals secretly sell more than $165 million of stock in more than 100 public issuers, many of which were promoted through a boiler room stock promotion company that linked to the group of boiler room stocks that were suspended in July of 2019, including BKIT.
Earlier this week, on April 16th, the SEC obtained a final judgment against three defendants, Morrie Tobin, Milan Patel, and Matthew Ledvina, who were charged with profiting off shares sold through Roger Knox in Environmental Packaging Technologies Holdings, Inc. (EPTI) and CURE Pharmaceutical Holding Corp (CURR).
In the parallel criminal action, Tobin, Patel, and Ledvina pleaded guilty to conspiracy to commit securities fraud. Tobin was sentenced to a term of imprisonment of 12 months and a day, ordered to forfeit $4 million, and fined $100,000. Patel was sentenced to a term of imprisonment of 15 months and fined $50,000. Ledvina was sentenced to a term of probation and fined $50,000. In addition, Tobin, Patel, and Ledvina were ordered to pay $1,908,583 in restitution on a joint and several basis.
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 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.