Russian-speaking lawyer from New York with an accomplice cranked the scam on $ 86 million

Фото: Depositphotos

Former executive director of a trading company CodeSmart Holdings, Inc. (CodeSmart) Ira Shapiro, as well as a lawyer from Manhattan and the founder of the company Ofsink LLC Darren Ossink pleaded guilty to conspiring to commit securities fraud amounting to $ 86 million.

Scam was held using the company CodeSmartwhich on the stock exchange uses the ticker ITEN, reports US Department of Justice.

According to investigators, in early May 2013, the conspirators gained control of three million shares. CodeSmart, after which fraudulently using third companies artificially inflated prices for them, and when the price reached the desired level, they sold their shares with a large profit. This is the classic scheme of exchange fraud, which is called Pump and Dump.

The first time fraudsters applied it between May 13 and August 21 of the year 2013. During this period, conspirators manipulated stock price with the help of false rumors and other methods. CodeSmartby raising their cost from $ 1,77 to $ 6,94. When they sold their shares and stopped artificially inflating prices, the value of the company's shares fell to $ 2,19.

They cranked the second circuit between August 21 and September 20 2013. During this period, fraudsters manipulated the price of shares. CodeSmartby raising it from $ 2,19 to $ 4,60, after which the value of the paper again dropped to $ 2,13.

Market capitalization CodeSmart at the highest closing price of $ 6,94 per share on July 12 2013, the year was $ 86 347 800. However that day CodeSmart filed a modified form of 10-K to the US Securities and Exchange Commission, in which it indicated only $ 6 000 total assets, $ 7 600 in the form of income and net loss of $ 103 141. K 30 December 2013 Securities CodeSmart sold for $ 0,66 per share, and July 9 for 2014, one share of the company was worth $ 0,01.

The court sentenced Shapiro and Ossinka to five years of imprisonment of everyone, a fine and confiscation of funds obtained by criminal means. They were also ordered to pay restitution to victims of the scam victims.

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