Federal authorities accuse a N.Y. man of involvement in a stock fraud scam that netted millions of dollars.
Federal authorities unsealed an indictment Feb. 1 in Detroit
accusing stock broker Gregg M. Berger of New York
of running a multimillion-dollar "pump-and-dump" scam for more than
two years.
The superseding indictment accuses Berger, 47, of conspiring with Alan
Ralsky, Francis Tribble, How Wai John Hui, Scott Bradley and others to carry
out the scheme from January 2005 to December 2007. According to the indictment,
Berger sold roughly 30 million shares of stock, making roughly $30 million for
his co-conspirators and more than $600,000 in commissions for himself. Ralsky,
Tribble, Hui and Bradley have
all
previously been convicted and sentenced for their roles in the case.
"Pump-and-dump schemes undermine the integrity of our stock
markets," said Assistant Attorney General Breuer, in a statement.
"When stock brokers exploit their trusted positions to enrich themselves
at the expense of innocent investors, as Mr. Berger is charged with doing here,
we will pursue them vigorously."
The charges arose after an investigation by the FBI, U.S. Postal Inspection
Service and the Internal Revenue Service discovered the defendants
were
sending spam to manipulate thinly traded stocks, authorities said.
According to the indictment, Berger's role was to act as the stock broker for
the conspiracy, establishing brokerage accounts for trading the stocks that
were illegally promoted, arranging for shares to be transferred into the
brokerage accounts, executing stock trades at the direction of Tribble rather
than the direction of the named account holders and transferring funds from the
trading of the stocks to bank accounts controlled by the conspirators.
He is also accused of providing confidential account information, including
trade amounts, prices, cash balances and wire transfer details, to Tribble,
Bradley and others involved in the scheme who were not entitled to such
information without authorization from the named account holders.
According to authorities, the artificially inflated stocks that were then
sold by Berger and the others included China World Trade Corporation, Pingchuan
Pharmaceutical Inc., China Digital Media Corporation, World Wide Biotech and
Pharmaceutical Co., China Mobility Solutions and m-Wise.
The indictment charges Berger with one count of conspiracy to commit
securities fraud and wire fraud. If convicted, he faces a maximum penalty of 25
years in prison and a $250,000 fine. He is scheduled to be arraigned on Feb. 8, 2011, in U.S.
District Court in Detroit.
The U.S.
Securities and Exchange Commission (SEC) has also filed civil fraud charges
against Berger, seven other individuals and three companies involved in the
scheme.
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