Plasticon International, Inc. (fka PLNIQ)

[scion]

I. Summary of the Case

On June 22, 2012, following a two-week trial, a jury convicted Turek of all thirteen counts of the indictment: eight counts of securities fraud and five counts of filing false tax returns.

The evidence at trial showed that Turek was the president, chief executive officer and director of Plasticon International, Inc. From 2004 to 2006, Turek caused Plasticon to issue billions of shares of stock to himself pursuant to false and backdated promissory notes. The promissory notes falsely claimed that Plasticon owed Turek more than $8 million as a result of loans he had made to the company. Turek frequently directed his secretary, Judy Paynter, to backdate by several years promissory notes payable to him.

To evade SEC rules limiting the sale of stock by an officer or director, Turek feigned giving his Plasticon stock to various nominees including his children and his deceased aunt. Turek then caused the nominees to sell the stock into the market. As a result of these sales, Turek received more than $11.4 million personally and through LexReal Co, LLC, a shell company that he owned and controlled.

To create investor demand for the stock that his nominees were selling, Turek issued press releases falsely stating that Plasticon was profitable and that it owned patents worth millions of dollars. Turek also falsely stated in an interview broadcast on the internet that he invested millions of dollars into Plasticon and that he had been working for nothing for three and a half years. Finally, Turek made false statements in Plasticon’s SEC filings in which he falsely stated that he had loaned the company millions of dollars when he had not. As a result of Turek’s false statements, more than 8,500 investors purchased Plasticon stock and lost more than $18 million.

Turek filed false tax returns for himself for the years 2003 through 2007. During three of those years, he reported no more than $36 in total income. For the entire five years, Turek failed to report more than $12 million in income on his tax returns.


- OCR extract
Doc 56 PDF file
http://www.scribd.com/doc/109485717/USA-v-Turek-Doc-56-Filed-04-Oct-12