United States v. Jonathan Randall Curshen, et. al.
Court Docket Number: 1:11-cr-20131-RWG
By order dated December 22, 2011, this case and all further proceedings have been transferred to the Hon. Richard W. Goldberg, a visiting judge who will be sitting in the United States District Court for the Southern District of Florida, Wilkie D. Ferguson, Jr. United States Courthouse, 400 North Miami Avenue, Miami, Florida. (Copy of the transfer order is attached below). Jury selection and trial for co-defendants Jonathan Randall Curshen and Nathan Bradley Montgomery is set before Judge Goldberg in Room 13-3 on January 17, 2012 at 9:30 a.m.
On October 6, 2011, Judge Jose Martinez issued an order approving certain alternative notice procedures to be followed by the Government in alerting victims to future court proceedings relating to this case, as required by the Justice For All Act of 2004. The full text of the Court's Order is below.
On April 28, 2011, a grand jury returned the ten count superseding indictment attached below against defendants Jonathan Randall Curshen, New York securities attorney Michael Simon Krome, Ronny Salazar Morales, a/k/a "Ronny Salazar," of Costa Rica, Robert Lloyd Weidenbaum, Eric Ariav Weinbaum, Israeli citizen Izhack Zigdon, Nathan Bradley Montgomery, Timothy Barham, Jr., and Ryan Mark Reynolds, charging each with one count of conspiracy to commit securities fraud, wire fraud and mail fraud (Count 1: 18 U.S.C. § 371) stemming from a securities fraud "pump and dump" manipulation scheme involving shares of Co2Tech stock. The superseding indictment added defendants Montgomery, Barham and Reynolds, and also charges defendants Curshen and Salazar Morales each with one count of conspiracy to commit money laundering (Count 10: 18 U.S.C. § 1956(h)). In addition, the superseding indictment also charges Krome with one count of securities registration violation (Count 2: 15 U.S.C. § 77e(a)) and one count of obstruction of justice (Count 9: 18 U.S.C. § 1512(c)(2)) and also seeks forfeiture (18 U.S.C. § 981).
According to the superseding indictment, Curshen was the principal behind Red Sea Management and Sentry Global Securities, two companies located in San Jose, Costa Rica, that provided offshore accounts and facilitated trading in penny stocks. The superseding indictment alleges that Weinbaum and Zigdon took control of the outstanding shares of a company called CO2 Tech (ticker CTTD), which traded in the over-the-counter market through listings on Pink Sheets, an inter-dealer electronic quotation and trading system. Weinbaum and Zigdon allegedly obtained the shares by retaining Krome, a securities attorney in New York, who allegedly employed a method to evade federal securities registration requirements in order to provide co-conspirators with millions of unregistered and "free-trading" shares of CO2 Tech that the co-conspirators could not have otherwise legally obtained.
The superseding indictment alleges that the shares were subsequently sold to the general investing public by Weinbaum, Zigdon, Curshen and Salazar Morales, a Sentry Global stock trader, through Sentry Global's stock trading floor in Costa Rica. By evading the registration requirements, according to the indictment, the co-conspirators were able to hide from the investing public the actual financial condition and business operations of the company. The superseding indictment also alleges that Weidenbaum, Reynolds, Montgomery, and Barham coordinated trades by purchasing shares of CO2 Tech on the open market from Curshen, Weinbaum, and Salazar Morales. Weidenbaum allegedly was paid approximately $1 million by Weinbaum and Zigdon for Weidenbaum and his co-conspirators' participation in sham trades of CO2 Tech stock to make it appear that there were genuine investors interested in the stock.
As alleged in the superseding indictment, this fraudulent pump-and-dump scheme involved, among other things, the issuance and dissemination of false and misleading press releases that were designed to make CO2 Tech appear to have business prospects. The scheme also allegedly involved coordinating trading activities. Defendants Weidenbaum, Reynolds, Montgomery, and Barham, who were stock promoters, allegedly coordinated trades by purchasing shares of CO2 Tech on the open market in order to artificially inflate shares and volume to create the appearance of legitimate buying interest by legitimate investors. These purchases allegedly were made by buying shares from defendants Curshen, Weinbaum, Salazar, and others. The superseding indictment further alleges that the coordinated trades were concealed from the investing public.
After fraudulently "pumping" the market price and demand for CO2 Tech stock through these false and misleading press releases and coordinated trades, Weinbaum, Zigdon, Curshen, Salazar Morales, Reynolds, Barham, and Montgomery allegedly "dumped" shares by selling them for large profits to the general investing public in the over-the-counter market through listings on Pink Sheets. These shares were purchased by unsuspecting investors and were often rendered virtually worthless.
Curshen, Robert Lloyd Weidenbaum, Michael Simon Krome, Nathan Bradley Montgomery, Timothy Barham, Jr., and Ryan Mark Reynolds were all arraigned and released on personal security bonds. Ronny Salazar Morales, Eric Ariav Weinbaum and Izhack Zigdon are currently fugitives.
An indictment is merely a charge, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt.
Related Cases: In a related case before Judge Martinez, co-defendant Robert Lloyd Weidenbaum has pleaded guilty for his role in the scheme. Weidenbaum is scheduled to be sentenced on February 21, 2012 at 1:30 p.m. In addition, Tim Barham, Jr., Ryan Mark Reynolds and Michael Simon Krome have pleaded guilty and are scheduled to be sentenced by Judge Goldberg on May 9, 2012 at 9:30 a.m.
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