This story has some familiar rings to it. Not much different than what we have come to know of RSMI in my opinion. What made the SEC invetigate this story but the SEC has no interest in to looking at RSMI. Got this off HOTSTOCKED.COM also.. Stock Spammer Gets 10-Year Sentence
Contributed by: Martinas B.
Date: 21 Mar, 2008
Michael Saquella, a.k.a. Michael Paloma, a man, who committed securities and electronic mail frauds has been given ten years in federal prison. Paloma was also ordered to pay $7,806,303.58 in damages.
In 2004, Mr Paloma, 47 and his other four colleagues hustled investors by convincing owners of 15 small corporations to turn over large chunks of those firms' penny stocks after promising that they could take the companies public.
They then e-mailed fraudulent press releases to drive interest in the companies' stocks, create artificial demand and drive up share prices. Medlin was one of several spammers hired by Saquella, Kaplan, and Zemla to push the stocks.
Once the stock price had been pumped up, the men dumped the shares they controlled, leaving duped investors holding the bag. The scams netted more than $20 million in profits, said Alice Fisher, assistant attorney general of the Justice Department's criminal division. The men kept the bulk of the proceeds, but some were turned over to the companies in question.
"What makes this case stand out is the intricacy of the scheme," said Cheryl Scarboro, associate director of the SEC's enforcement division, in a statement. "These defendants were not only able to sneak these companies onto the public markets through the back door, they were able to manipulate those markets with old-fashioned pump-and-dump techniques."
