SEC Obtains Over $5 Million Final Judgment Against Charlie Abujudeh in Multi-Million Dollar Microcap Pump and Dump Scheme
On January 20, 2023, the U.S. District Court for the Eastern District of New York entered a final judgment against California resident Charlie Abujudeh whom the SEC had charged for his role in a microcap fraud scheme targeting retail investors. Among other things, the judgment orders Abujudeh to pay a total of over $5 million.
According to the SEC’s complaint, filed on July 22, 2021, from August 2019 to at least September 2020, Abujudeh worked with others to fraudulently sell several microcap companies’ stock to investors by making misleading statements during high-pressure sales calls and/or email promotions.
The SEC alleges that, as part of the scheme, Abujudeh and his associates convinced investors to invest in the stock of Odyssey Group International, Inc. (ODYY), as well as other microcap companies, including Scepter Holdings, Inc. (BRZL), and CannaPharmaRx, Inc (CPMD).
Abujudeh paid stock promoters to tout Odyssey stock over the phone to unsuspecting retail investors who were recruited through false and misleading representations. Abujudeh also allegedly paid for email promotional campaigns and schemed to hide his control over and simultaneous sale of Odyssey, Scepter, and CannaPharmaRx stock into the increased demand that the promotions he paid for had generated.
The SEC’s complaint alleges that Abujudeh funneled hundreds of thousands of dollars of the illegal Odyssey stock sale proceeds to an Odyssey insider with whom he had been coordinating.
The declaration of lead SEC investigator, Trevor Donelan, goes into great detail about various parts of the scheme, including large payments to a Florida stock promoter and a Canadian attorney for their participation in the scheme, information about some of the stock promotion sites used for the various campaigns, and details from the recorded conversations with a CW.
Donelan included exhibits of stock promotions run for Abujedeh’s benefit by the following stock promotion sites: thewolfofpennystocks.com, dearwallstreet.com, beatpennystocks.com, makepennystocksgreatagain.com, marketprofitcenter.com, stockoftheweek.net, Market Rising LLC, and protraderelite.com. Donelan also specifically pointed out that Abujedeh was a subscriber to thewolfofpennystocks.com from 2015 until June 2021.
Our research also identified Charlie Abujedeh as a major note holder in Itonis Inc (ITNS) and HQ Global Education Inc (HQGE) and as a note holder in Nexus Energy Services Inc (IBGR).
Without admitting or denying the allegations in the SEC’s complaint, Abujudeh consented to the entry of a final judgment permanently enjoining him from violating the registration provisions of Section 5 and the antifraud provisions of Section 17(a) of the Securities Act of 1933, and the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Abujudeh also consented to the imposition of a five-year penny stock bar, a five-year officer-and-director bar, disgorgement of $5,423,045 and prejudgment interest of $115,993, and a $414,366 civil penalty.
In a parallel action, a criminal indictment was filed against Abujudeh with the US District Court of Eastern New York in July 2021. Abujudeh waived his right to prosecution by indictment in May 2022, and the case has been stalled ever since, without even a future court date on the docket. This could be an indication that Abujedeh is providing information to the DOJ (possibly even assisting them in other cases), ahead of a future plea agreement.
To speak with a Securities Attorney, please contact Brenda Hamilton at 200 E Palmetto Rd, Suite 103, Boca Raton, Florida, (561) 416-8956, or by email at [email protected]. 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.
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