Unfortunately the CEO's of these companies know that it takes a long time for the SEC to catch up with them.
This is the guy from TSIG/TIGI. They finally nabbed him in 2005 and all of the garbage happened as far back as 1996.
10-17-2005 -- Gordon, Robert P. et al. -- Indictment -- News Release
Five Indicted in Alleged Stock Swindle that Cost Investors More Than
$15 Million
CAMDEN - Two New Jersey men and three others from Florida and New York were charged in a federal Indictment unsealed today with running an intricate stock fraud and money laundering scheme that cost public investors more than $15 million in losses, U.S. Attorney Christopher J. Christie announced.
The five defendants were either arrested today by the FBI or surrendered voluntarily.
The Indictment describes a scheme in which the defendants, along with other unindicted cooperating co-conspirators, used deceptive and manipulative practices in connection with the fraudulent issuance, purchase and re-sale of stock of TeleServices Internet Group Inc. (TSIG) and Phoenix Information Systems, Inc. (Phoenix), from December 1996 through October 2000.
Both companies were publicly traded on the Over the Counter Electronic Bulletin Board System. According to the Indictment, the conspiracy involved the chairman of TSIG and Phoenix, TSIG's former independent auditor, and at least three licensed securities brokers, two of whom resided and worked in New Jersey. Furthermore, three co-conspirators who were not charged in the Indictment include a securities attorney from Denver, Colo., a New Jersey securities broker who formerly owned the brokerage firm of DiMedio Kirchhoff & Co., and a Canadian securities broker employed at Union Securities in Vancouver, British Columbia, Canada.
Charged in the Indictment unsealed in U.S. District Court in Camden were:
• Robert P. Gordon, 55, of St. Petersburg, Fla., the major shareholder of TSIG and the company's CEO, CFO, chairman and director. Gordon was also the founder and chairman of Phoenix;
• Joseph F. Morgan, 50, of St. Pete Beach, Fla., who served as TSIG's independent auditor during the late 1990's, and later purportedly performed capital raising and promotion activities for the company;
• Bernard Deutsch, 71, of Brooklyn, N.Y., who was the president and chairman of an entity called Lexus Partners, Ltd., with offices in Brooklyn. Deutsch also controlled two entities called Basic Investments, Ltd. and IRA Group, Inc., both with offices in Brooklyn. Deutsch, too, purportedly performed capital raising and promotion activities for TSIG;
• Thomas S. King, 47, of Cherry Hill, N.J., who was licensed to sell securities by the National Association of Securities Dealers (NASD). King was the broker on a stock brokerage account owned by Gordon and maintained at DiMedio Kirchhoff & Co., Inc. That account was in the name Visitors Services International Corp., which changed its name to TSIG in 1999.
• Robert Pozner, 61, of Ridgewood Park, N.J., who was licensed to sell securities by the NASD. During the time period alleged in the Indictment, Pozner was employed at various securities brokerage firms, including Investors Associates, Inc. and Glen Michael Financial, Inc., both New Jersey brokerage firms.
Pozner and King, along with their attorneys, surrendered to Special Agents of the FBI's Atlantic City Resident Agency today. Both defendants were arraigned on the Indictment today before U.S. Magistrate Joel B. Rosen, in Camden. Judge Rosen release both on $250,000 secured bond. King was released with electronic monitoring. Deutsch was arrested early today in New York by Special Agent of the FBI and was to have an initial appearance before U.S. Magistrate Mark Falk, in Newark today. Morgan and Gordon were arrested today by members of the FBI in Florida and are expected to have an initial appearance tomorrow, October 18, in federal court in the Middle District of Florida.
The Indictment alleges that the defendants, with the assistance of other insiders, were able to secretly gain control of nearly 100 million free-trading shares of TSIG stock and sold those shares in the public marketplace to unsuspecting investors. In the end, the defendants and co-conspirators received millions of dollars, leaving unsuspecting investors with worthless or near worthless stock.
For instance, several of the defendants allegedly executed fraudulent consulting agreements between TSIG and both domestic and offshore entities, which the defendants secretly controlled. Typically, the offshore entities were located in the Cayman Islands.
The consulting agreements falsely indicated that the entities provided a service to TSIG and in exchange, in lieu of monetary payment, the defendants caused millions of shares of the TSIG stock to be issued in the name of the entities, according to the Indictment. The fraudulent consulting agreements allegedly allowed the defendants to bypass federal securities registration requirements, including, among other things, full and complete disclosure of insider transactions.
The fraudulently received shares were then allegedly laundered through brokerage accounts that were controlled by defendants and maintained in Canada and the United States. Over time, those shares were systematically sold utilizing the services of the co-conspiring licensed securities brokers, who would sustain the stocks per share price through orchestrated transactions using pre-arranged sale and purchase prices. Often, the brokers purchased the TSIG shares for their retail customer portfolios without the customer's authorization. Afterward, the ill-gotten proceeds were often laundered by wire transferring those funds from the brokerage accounts to an attorney trust account located in Denver and then dispersed to the co-conspirators. In total, the co-conspirators received approximately $15 million through their fraud scheme.
The long-term investigation was an effort of the Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigation Division, along with Assistant U.S. Attorney Thomas S. DiLeonardo.
The Indictment can be found on the Public Affairs Office web site at: www.usdoj.gov/usao/nj/publicaffairs/index.html
The defendants are each charged in Count One of the Indictment, which alleges a conspiracy to commit securities and wire fraud. Additionally, Gordon, Morgan, Deutsch and King are charged in Count Two of the Indictment, which alleges a conspiracy to commit money laundering. Each count carries a maximum penalty of 20 years in prison and a fine of $250,000 or twice the aggregate loss to the victims or gain to the defendants.
In determining an actual sentence, the judge to whom the case is assigned would, upon a conviction, consult the U.S. Sentencing Guidelines, which provide appropriate sentencing ranges that take into account the severity and characteristics of the offense, the defendant's criminal history, if any, and other factors. The judge, however, is not bound by those guidelines in determining a sentence.
Parole has been abolished in the federal system. Defendants who are given custodial terms must serve nearly all that time.
Despite Indictment, every defendant is presumed innocent, unless and until found guilty beyond a reasonable doubt, following a trial at which the defendant has all of the trial rights guaranteed by the U.S. Constitution and federal law.
Christie credited Special Agents of the FBI's Atlantic City Resident Agency, under the direction of Special Agent in Charge Leslie Wiser, Jr. in Newark, the IRS Criminal Investigation Division, under the direction of Special Agent in Charge Patricia J. Haynes, and the National Association of Securities Dealers, Washington, D.C., with the investigation leading to the Indictment.
The Government is represented by Assistant U.S. Attorney Thomas S. DiLeonardo of the Criminal Division in Camden.
- end -
Defense Attorneys:
Pozner - Miranda Fritz, Esq. New York City
King - Robert Stahl, Esq. Westfield
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