StockdungU Wednesday, 07/09/14 05:40:41 PM
Re: janice shell post# 71735
Post # of 71737
Feds charge two men in stock scam involving Boston "company" that was an FBI operation
Jul 9, 2014, 1:09pm EDT Updated: Jul 9, 2014, 2:52pm EDT
Federal officials today unsealed charges against two South Carolina stock promoters charged with building a stock scam around a Boston company controlled by the FBI.
Christopher R. Putnam, 37, and Christopher G. Nix, 34, both of Charleston, South Carolina, were charged with conspiracy to commit securities fraud. Prosecutors said the two men tried to defraud investors into buying stock in a company called Amogear, whose shares traded on the over-the-counter market under the ticker AMOG. An FBI agent's affidavit supporting charges against the two men states: "While Amogear purports to be a sports apparel company, it is actually a shell company that was acquired and controlled by the FBI through a cooperating witness as part of an FBI undercover operation."
The affidavit states that the cooperating witness, who is unidentified in court papers and working with the government in hopes of gaining leniency when sentenced on upcoming charges for securities-relates crimes, obtained control of the company in March 2012.
The affidavit continues: "From at least March 2012 through at least February 2014, Amogear had no operations and — aside from a few sample clothing items contained in a single cardboard box in the cooperating witness's office — no office." An undercover FBI agent was the company's CEO.
Nix and Putnam, the government alleges, engaged in a "pump and dump" scheme in which they conspired to artificially drive up the value of Amogear's shares prior to selling stock to unwitting investors in the company. Among other things, the government says, they sent "blast" emails intended to drive up the value of shares of the stock. The website says the pair controlled websites including: thestockscount.com, pennystockplayers.net, pennystockcircle.com, pennystockpros.net, 123stockalerts.com and stockmarketquote.us.
The two defendants could not be reached for comment.
The government says it has a recording of the following exchange in Boston in August 2012:
Nix: "You know, what's the plan for the actual company?"
Putnam: "Who gives a F$*& about the actual company?"
Cooperating witness, pointing to the box of clothes: "That's it right now."
In another exchange referenced in court documents, the undercover-agent-playing-CEO addresses Putnam's concerns about federal regulators coming knocking. The agent says: "I have some experience on that...I'll be the one that has first contact with anyone like that, FINRA or the SEC."
The U.S. attorney's office says the SEC shut down trading in the stock on February 10, 2014.
The charges come a day after the Wall Street Journal revealed an FBI sting operation called Operation Pennypincher.
