DD Support Board and Research Team

[scion]

Valley Center man accused of masterminding $6.5M 'pump-and-dump' scam

by Dan Weisman, Staff Writer
July 23, 2015
http://www.valleycenter.com/Articles-News-c-2015-07-23-92550.113122-Valley-Center-man-accused-of-masterminding-65M-pumpanddump-scam.html

Valley Center has had its share of scandals and curmudgeons to be sure, but multimillion-dollar money-laundering and stock manipulation schemes aren't associated generally with this rural lifestyle community.

Enter Harold Bailey Gallison II, 57, the alleged mastermind and one of nine defendants accused last week of running a "pump-and-dump" scheme designed to inflate the price of a common stock before selling it for a profit.

Keeping it real and in more appropriate money-laundering locales, the other defendants were from such financially sophisticated places as Miami, Costa Rica, Las Vegas and New York.

Investigators with the Federal Bureau of Investigations and the Securities Exchange Commission alleged Gallison controlled an offshore brokerage and money-laundering platform called "Moneyline" that was used for the $6.5 million fraud.

Tale of the tape

Here's how it worked, according to a Virginia federal court indictment unsealed on July 14:

The gang of nine used proprietary phone lines and instant messaging systems on non-U.S. computer servers to evade detection. They encouraged investors to buy shares in certain companies to inflate stock prices. Then, they sold their own shares at the artificially high price. Gallison faces two counts of conspiracy to commit wire fraud, two counts of securities fraud and one count of conspiracy to commit money laundering.

"The scheme was facilitated through an offshore brokerage and money-laundering platform controlled by Gallison that went by various names, including Sandias Azucaradas, Moneyline Brokers and Trinity Asset Services (collectively, Moneyline,)" FBI officials said.

"The defendants allegedly used Moneyline to create nominee accounts in the names of shell companies, and used those accounts to conceal both the true source and ownership of the securities and the flow of funds."

FBI's Washington D.C. Field Office. The Securities and Exchange Commission, the Financial Industry Regulatory Authority and the Criminal Division's Office of International Affairs provided the dump of the pump-and-dump crew. Senior Trial Attorney N. Nathan Dimock of the Criminal Division's Fraud Section and Assistant U.S. Attorneys James P. Gillis and Zachary Terwilliger of the Eastern District of Virginia are in charge of the legal honors.

Also named in the indictment were Anna Hiskey, 42, of Costa Rica; Michael Randles, 47, of Costa Rica; Roger Coleman, 79, of Las Vegas; Carl Kruse Sr., 75, of Miami; Carl Kruse Jr., 50, of Miami; Frank Zangara, 52, of Locust Valley, New York; Mark Dresner, 59, of Dix Hills, New York; and Charles Moeller, 46, of Sea Cliff, New York.

http://www.valleycenter.com/Articles-News-c-2015-07-23-92550.113122-Valley-Center-man-accused-of-masterminding-65M-pumpanddump-scam.html