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UD student named in 'pump and dump' civil suit

BY SEAN O’SULLIVAN • THE NEWS JOURNAL • MAY 21, 2009
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WILMINGTON -- Federal prosecutors in Delaware have unsealed a series of criminal charges and a civil lawsuit charging seven men with committing securities fraud.

Two other defendants, including a University of Delaware student, are named only in the civil complaint.

The group, including one man out of Newark – Pawel P. Dynkowski – are alleged to have operated a "pump and dump" scheme on small "penny" stocks. The frauds were operated between September 2006 and September 2008 and allegedly netted more than $6 million for the participants.

According to court papers, the group conspired to artificially drive up the price of certain companies through coordinated "wash" sales, to make it look as though there were increased interest and activity in the stock, which was timed with the issuing of fraudulent press releases by company officials, sometimes written by the conspirators, and false tips placed on internet message boards and small investor chat rooms.

Once the "pumped" stock reached a certain level – attracting unsuspecting outside investors – the group would sell or "dump" the shares they had been holding to reap a quick profit, the suit alleges.

The schemes sometimes took as little as a week, and in addition to issuing press releases some company officials also provided conspirators with stock in exchange for kickbacks once the fraud was completed, according to court papers.

Acting U.S. Attorney David C. Weiss announced the charges today in a press release along with officials from Immigration and Customs Enforcement, the IRS, the Delaware State Police and the Securities and Exchange Commission.

"The integrity of our nation's public stock markets requires protection from those greedy few who engage in market manipulation at the expense of many," said Weiss. "The wide-ranging actions of the defendants demonstrate rampant, serial abuse of the free-market system through a nationwide network of manipulative trading."

In addition to Dynkowski, 24, of Newark, who also has an address in California, the criminal indictments name Joseph Mangiapane Jr., 43, of Laguna Niguel, Calif.; Marc Riviello, 50, of Atherton, Calif.; Matthew W. Brown, 26, of Aliso Viejo, Calif.; Jacob Canceli, 50 of Mission Viejo, Calif.; Gerard D'Amaro, 38, of Lighthouse Point, Fla. And Angelo "Bill" Panetta, 48, of Montebello, Calif.

Canceli and D'Amaro are stock promoters, according to court papers, and Brown operated the penny stock Web site InvestorsHub.com.

Mangiapane and Riviello both were representatives of AIS Financial, and Mangiapane is also CEO of Rubicon Financial, the owner of AIS Financial.

All except Panetta are charged with one or more counts of the following: securities fraud, wire fraud, conspiracy to commit securities fraud, conspiracy to commit money laundering or money laundering offenses.

Panetta is charged with perjury and one count of obstruction of justice for allegedly lying to the Grand Jury.

Two men named in the civil complaint, but not charged criminally, are Adam Rosengard, a UD student, of Voorhees, N.J., and Nathan M. Michaud of Boston, a Web designer.

Contact Sean O’Sullivan at 324-2777 or [e-mail].

http://www.delawareonline.com/article/20090521/NEWS01/90521029/UD+student+named+in++pump+and+dump++civil+suit