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SEC Charges Eleven in Stock Manipulation Ring

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http://www.sec.gov/litigation/litreleases/2009/lr21053.htm

U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 21053 / May 21, 2009
Securities and Exchange Commission v. Pawel P. Dynkowski, Matthew W. Brown, Jacob Canceli, Gerard J. D’Amaro, Joseph Mangiapane Jr., Nathan M. Michaud, Marc J. Riviello and Adam S. Rosengard, Civil Action No. 09-361 (D. Del.) (May 20, 2009)


SEC Charges Eight Participants in Penny Stock Manipulation Ring
The Securities and Exchange Commission (“Commission”) announced today that it filed a complaint in the United States District Court for the District of Delaware against Pawel P. Dynkowski, Matthew W. Brown, Jacob Canceli, Gerard J. D’Amaro, Joseph Mangiapane Jr., Nathan M. Michaud, Marc J. Riviello and Adam S. Rosengard. The complaint alleges that in 2006 and 2007, Dynkowski, a Polish citizen who resided in the U.S., engaged in market manipulation schemes with at least four separate stocks: GH3 International, Inc., Asia Global Holdings, Inc., Playstar Corp., and Xtreme Motorsports of California, Inc. As alleged in the complaint, Dynkowski’s co-defendants each participated in one or more of these schemes, which together generated more than $6.2 million in illicit profits.

The SEC’s complaint alleges that these fraudulent schemes generally followed the same pattern: Dynkowski and his accomplices agreed to sell large blocks of shares for penny stock companies in exchange for a portion of the proceeds. The companies put these shares in nominee accounts that Dynkowski and his accomplices controlled. The defendants pumped the market price of the stocks using wash sales, matched orders and other manipulative trading, often timed to coincide with false or touting press releases by the companies, to give the market the false impression that there was real demand for these stocks. After artificially inflating the market price of the stocks, Dynkowski and his accomplices then dumped the shares obtained from the issuers and divided the illicit proceeds.

The SEC’s complaint further alleges that:

The pump-and-dump scheme involving GH3 International, Inc. stock occurred between October and December 2006. Dynkowski orchestrated this fraud with Matthew W. Brown, who operates a penny stock website called InvestorsHub.com. Brown introduced Dynkowski to a representative of GH3 and to Jacob Canceli, a penny stock promoter who participated in the scheme. Brown acted as a liaison between Dynkowski, Canceli and the issuer. Dynkowski and his associates used wash sales, matched orders, and other manipulative trading, timed to coincide with false, misleading and touting press releases by the company, to inflate the price of GH3 stock. Canceli provided the accounts from which Dynkowski subsequently sold purportedly unrestricted shares received from the issuer. The scheme culminated in mid-December 2006, with Dynkowski dumping 312 million shares of GH3 stock for total illicit proceeds of $747,609.

Brown planned the Asia Global pump-and-dump scheme with Joseph Mangiapane Jr. and Marc J. Riviello, who were both registered representatives at a small broker-dealer in California. Dynkowski and Nathan M. Michaud, who met through InvestorsHub.com, pumped the price of Asia Global stock using wash sales, matched orders and other manipulative trading, coordinated with false, misleading, and touting press releases by the company. The scheme occurred in three cycles: August-September 2006, November-December 2006, and January-February 2007. After manipulating the price of stock, Dynkowski, Brown, Mangiapane and Riviello dumped more than 54 million shares that had been improperly registered on SEC Form S-8 and held in nominee accounts. The illicit proceeds from this scheme totaled at least $4,050,529.

Dynkowski and Gerard J. D’Amaro carried out the Playstar pump-and-dump scheme. The two of them met through InvestorsHub.com. D’Amaro acted as the liaison with the issuer as well as the nominee account holder for the purportedly unrestricted shares received from the company. In this scheme, which occurred during October and November 2006, Dynkowski pumped Playstar’s stock through wash sales, matched orders and other manipulative trading. Dynkowski and D’Amaro sold 11.5 million shares for total illicit proceeds of $1,180,294.

Dynkowski and an accomplice carried out the Xtreme Motorsports pump-and-dump scheme. The two of them, who met through InvestorsHub.com, pumped Xtreme Motorsports stock through wash sales, matched orders and other manipulative trading during January and February 2007. Dynkowski’s friend, Adam S. Rosengard, served as the nominee account holder who facilitated the dump of 13 million purportedly unrestricted shares of Xtreme Motorsports stock. After pumping the stock, Dynkowski sold the shares from Rosengard’s account generating illicit proceeds of $257,646.
The SEC’s complaint alleges that Dynkowski and Brown violated Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933 (“Securities Act”), Sections 10(b) and 13(d) of the Securities Exchange Act of 1934 (“Exchange Act”), and Rules 10b-5, 13d-1 and 13d-2 thereunder; that Canceli, D’Amaro, Mangiapane, and Riviello violated Sections 5(a), 5(c), and 17(a) of the Securities Act, Section 10(b) of the Exchange Act, and Rule 10b-5; that Michaud violated Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act, and Rule 10b-5; and that Rosengard violated Sections 5(a) and 5(c) of the Securities Act. The complaint seeks against each defendant a permanent injunction against future violations, disgorgement of ill-gotten gains with prejudgment interest, and civil monetary penalties, and, as to certain defendants, orders barring them from participating in penny stock offerings.

The U.S. Attorney’s Office for the District of Delaware also announced today felony criminal charges against Dynkowski, Brown, Canceli, D’Amaro, Mangiapane, and Riviello.

The SEC thanks the U.S. Attorney’s Office for the District of Delaware; the Department of Homeland Security, Immigration and Customs Enforcement; the Internal Revenue Service – Criminal Investigations; and the Delaware State Police for their assistance in this matter.

The SEC’s investigation is continuing.

 

Documents & Articles

 

The Full SEC Complaint:

http://sec.gov/litigation/complaints/2009/comp21053.pdf

 

The US DOJ Press Release:

http://www.usdoj.gov/usao/de/press/2009/Pump%20&%20Dump%20Stock%20Schemes%20Indictments.pdf

 

Troopers aid in scam case:

http://www.gosanangelo.com/news/2007/feb/17/troopers-aid-scam-case/

 

UD student, Newark man named in
'pump and dump' civil suit:

http://www.delawareonline.com/article/20090521/NEWS01/90521029/1006/NEWS/UD+student++Newark+man+named+in+%3Cbr%3E+pump+and+dump++civil+suit

 

7 charged in alleged stock scheme:

http://www.businessweek.com/ap/financialnews/D98AQDQG0.htm

 

SEC Sues Eight in Three States in Penny Stock Ring:

http://www.bloomberg.com/apps/news?pid=20601087&sid=an0vTmWDEj_Y&refer=home

 

Pompano Beach man charged in stock manipulation:

http://www.bizjournals.com/southflorida/stories/2009/05/18/daily63.html

 

O.C. stock board founder, broker indicted for fraud:

http://ocbiz.freedomblogging.com/2009/05/21/oc-stock-board-founder-broker-indicted-for-fraud/12005/

 

Former Newark man among those indicted in stock fraud scheme:

http://www.ledgerdelaware.com/articles/2009/05/21/news/doc4a156b9de488d415326660.txt

 

The SEC To The Rescue!:

http://dealbreaker.com/2009/05/the-sec-to-the-rescue.php

 

Las Vegas company's stock manipulated for profits:

http://m.lasvegassun.com/news/2009/may/21/sec-las-vegas-companys-stock-manipulated-profits/

 

Felony Criminal Charges For InvestorsHub.com Operator, Matthew Brown, In Penny Stock Scheme:

http://blogs.money.aol.ca/2009/05/21/felony-criminal-charges-for-investorshubcom-operator-matthew-brown-in-penny-stock-scheme/

 

04/16/2009 3 REDACTED VERSION of 2 Indictment by USA as to Defendant Sealed. (rpg) (rpg). (Entered: 04/22/2009)

http://tinyurl.com/n9t6nz 

 

- Note: This link will not post as a live link. Copy and paste it to any browser and the Pacer Document PDF file can be opened.

 

 

 

 

 

 

Companies Involved

GH3 International, Inc. (stock ticker: GHTI)

http://investorshub.advfn.com/boards/board.aspx?board_id=5091

 

Asia Global Holdings Corp. (stock ticker: AAGH)

http://investorshub.advfn.com/boards/board.aspx?board_id=5623

 

Playstar Corporation (stock ticker: PLYCF)

http://investorshub.advfn.com/boards/board.aspx?board_id=3011

 

INCA Designs, Inc. (stock ticker:IDGI)

 

http://investorshub.advfn.com/boards/board.aspx?board_id=8819

 

 

Participants Charged by the SEC

The SEC's complaint, filed in federal district court in Delaware, charges:

Matthew W. Brown, age 26, of Aliso Viejo, California:

Pawel Dynkowski of Newark, Del.

Jacob Canceli of Mission Viejo, Calif., who is a stock promoter.

Gerard J. D'Amaro of Pompano Beach, Fla., who is a stock promoter.

Joseph Mangiapane Jr. of Laguna Niguel, Calif, who was a registered representative at AIS Financial, Inc and is currently CEO of Rubicon Financial, Inc., which owned AIS Financial, Inc. during the relevant time period.

Nathan M. Michaud of Boston, Mass., who is a web site designer.

Marc J. Riviello of Redwood City, Calif., who was a registered representative at AIS Financial, Inc.

Adam S. Rosengard of Voorhees, N.J., who was a student at the University of Delaware during the relevant time period.

 

 

Persons Indicted by DOJ

The seven defendants named in the DOJ indictments are:

Pawel Dynkowski, age 24, formerly of Newark, Delaware;

Joseph Mangiapane, Jr., age 43, of Laguna Niguel, California;

Marc Riviello, age 50, of Atherton, California;

Matthew W. Brown, age 26, of Aliso Viejo, California;

Jacob Canceli, age 50, of Mission Viejo, California;

Gerard D’Amaro, age 38, of Lighthouse Point, Florida; and

Angelo R. “Bill” Panetta, age 48, of Montebello, California.

 

 

 

 

FYI From MATT >>>>>

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=38023743

Posted by: IH Admin [Matt] Date: Thursday, May 21, 2009 1:03:12 PM
In reply to: None Post # of 127421

Re: SEC complaint/etc

Hi guys,
I'm aware of the SEC complaint/Delaware situation that was released today. You guys know the deal - I can't say much without my legal counsel ripping my head off (certainly the way I tend to write).
If/when I'm cleared to update everyone, I will.
ADVFN is aware of the situation and they consider it a personal matter.
Just so rumors aren't circulating -- iHub isn't going anywhere. The community and the incredible Admin team are what make this place. The site has been absolutely rocking lately and there's no reason that will change. We're doing some upgrades next week to the hardware infrastructure and the Nerds are working on some very groovy cutting edge stuff that we've dreamed up the last few weeks that I'm pretty excited to release.

I appreciate all the concern/messages you guys have sent.

 

 

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#9754  Sticky Note Let's all stop the name calling. Okay? janice shell 06/16/09 01:58:17 AM
#4845  Sticky Note Some users have been expressing concerns about the clem 05/26/09 02:04:44 PM
#16741   ALL: The time has come - this IH Admin [Shelly] 06/15/11 02:57:34 PM
#16740   No wonder you didn't come after me with Paulie Cashews 06/15/11 02:50:53 PM
#16739   I TOTALLY agree with you about people needing mimurray 06/15/11 02:47:11 PM
#16738   What if you are unisexed? fung_derf 06/15/11 02:42:25 PM
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#16736   Isn't the casino just doing what every other Newly2b 06/15/11 02:32:28 PM
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#16733   Without a doubt!!! mimurray 06/15/11 02:14:48 PM
#16732   I can still deal with stupid people who fung_derf 06/15/11 02:13:22 PM
#16731   Yep...the temptation is just too great for people mimurray 06/15/11 02:10:23 PM
#16730   Wow! Your Butterfly/Amazon/Arctic analogy was amazing! Paulie Cashews 06/15/11 02:04:01 PM
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#16728   I believe that people who wish to gamble mimurray 06/15/11 01:56:20 PM
#16727   Missing from this model is what everyone on Newly2b 06/15/11 11:51:46 AM
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#16725   You are barking up the wrong tree there fung_derf 06/15/11 11:30:39 AM
#16724   The bop.gov website keeps track of his birthday sidedraft 06/15/11 11:28:05 AM
#16723   Do you NOW understand why I pleaded with bar1080 06/15/11 11:17:28 AM
#16722   2Day is Matt's Birthday ... !! Sleigh-Ridin'Larry 06/15/11 11:03:34 AM
#16721   One side says that investing in Penny Stocks Newly2b 06/15/11 11:00:26 AM
#16720   And people seem to forget Matt spent weeks.... MrBankRoll 06/15/11 10:03:27 AM
#16719   There is a difference Bruce A Thompson 06/15/11 09:39:47 AM
#16718   I had a guy on one of my boards stockmasterflash 06/15/11 08:24:45 AM
#16716   MegaTrader, sorry, Matt deserves jail and more for kenco 06/15/11 06:47:14 AM
#16715   re: "Don't hate the player, hate the game." gotmilk 06/15/11 03:32:50 AM
#16714   This is quickly becoming my newest most FAVORITE The Original dpb5! 06/15/11 01:58:53 AM
#16713   Been there, done that. Once he gets incarcerated, Paulie Cashews 06/14/11 10:39:24 PM
#16712   Where is Paulie when you need him? MegaTrader 06/14/11 10:05:44 PM
#16711   AHA! So you do recognize it's illegal. Well fung_derf 06/14/11 10:05:19 PM
#16710   Do you understand they have lobbyists? MegaTrader 06/14/11 10:05:05 PM
#16709   LOL! Now you've crossed the line! Comparing Matt fung_derf 06/14/11 10:04:33 PM
#16708   I have not dealt with or traded penny MegaTrader 06/14/11 10:03:54 PM
#16707   This must have been satisfying to Bre-X victims: bar1080 06/14/11 10:03:54 PM
#16706   I will say this and I know this MegaTrader 06/14/11 10:02:05 PM
#16705   Capitalism yes. Criminal system, no. Can't believe you fung_derf 06/14/11 10:01:51 PM
#16704   Do you understand that casinos have regulations? I fung_derf 06/14/11 10:00:31 PM
#16703   This is capitalism. It's not perfect, but MegaTrader 06/14/11 09:55:39 PM
#16702   I think you're the one who is confused. MegaTrader 06/14/11 09:54:57 PM
#16701   You're killing me dude. How can the average fung_derf 06/14/11 09:54:32 PM
#16700   That's how it is much of Europe and MegaTrader 06/14/11 09:52:08 PM
#16699   Probably right nextdoor to EVO! Newly2b 06/14/11 09:52:07 PM
#16698   No but maybe hung by his thumbs... what frankie_fillet 06/14/11 09:51:37 PM
#16697   And I've always wondered about that poor Enron Newly2b 06/14/11 09:50:23 PM
#16696   He lived "scot-free" for a short time. Walsh k9narc 06/14/11 09:49:35 PM
#16695   Wait! Women are illegal?? I'm in big trouble. fung_derf 06/14/11 09:49:00 PM
#16694   How is a casino ever legitimate? MegaTrader 06/14/11 09:46:23 PM
#16693   Bre-X was Canadian, but you are right. Former bar1080 06/14/11 09:45:32 PM
#16692   Few are saying what a "terrible" person Matt fung_derf 06/14/11 09:44:45 PM
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