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Former BioShield chairman charged with securities fraud, perjury
Timothy C. Moses of Atlanta was charged late Sept. 29 in a two-count indictment for securities fraud and perjury, according to Sally Quillian Yates, acting U.S. Attorney for the Northern District of Georgia
Moses is the former chairman, president and CEO of Norcross-based International BioChemical Industries Inc. (IBCL), formerly known as BioShield Technologies Inc. Prior to declaring bankruptcy, IBCL's developed, marketed and sold antimicrobial products used to destroy or suppress the growth of harmful microorganisms such as bacteria, viruses and fungi on inanimate objects and surfaces. IBCL's stock was initially listed on Nasdaq and subsequently on the Over-the-Counter Bulletin Board.
The indictment charges that, from on or about Jan.. 29, 2003 to on or about Feb. 6, 2003, Moses executed a scheme to defraud IBCL's shareholders and potential shareholders in connection with IBCL's securities. Specifically, the indictment charges that Moses executed the scheme by creating and issuing a series of false and deliberately misleading press releases that suggested the federal government had a business interest in IBCL's purported anthrax remediation technology.
The indictment alleges issuance of the press releases caused an artificial increase in the trading volume and price of IBCL common stock, leading to an aggregate loss to IBCL shareholders of between $1 million and $2.5 million. Issuance of the false press releases and their effect on IBCL's stock price also allowed Moses to sell, on inside information and at a false premium, certain IBCL stock he held, generating approximately $70,000 in illicit proceeds.
Finally, Moses' manipulation of IBCL's stock price allowed the company to pay its creditors and to satisfy certain of its debt obligations, the indictment charges. Two of the releases were issued after the staff of Securities and Exchange Commission told Moses the press releases already issued by IBCL had created a false impression in the marketplace for IBCL stock. The SEC halted trading of IBCL stock on Feb. 6, 2003, after millions of shares had been acquired, and Moses had sold his IBCL stock, at the inflated prices generated by IBCL's false press releases.
The indictment further charges that Moses later committed perjury in a civil deposition taken by the SEC in connection with its lawsuit against Moses and IBCL for securities fraud, specifically by claiming that he was unaware that of his sale of IBCL stock after issuance of the false press releases, when in fact he had directed his broker to execute the trades.
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