NewMarket Technology (fka NWMT)

[claymolly]

he former CEO of a Fremont tech company has pleaded guilty to securities fraud and two other charges for his role in a scheme that netted about $25 million for him and associates, a federal prosecutor said.

Jasper Knabb, ex-chief of Pegasus Wireless Corp., admitted in a San Francisco courtroom Thursday that he fabricated 21 promissory notes and other documents between May 2005 and June 2008, said Melinda Haag, a U.S. attorney with the Department of Justice's Northern District of California.

The fake documents gave the false impression that his wireless tech company had outstanding debt, and he then had Pegasus issue more than 490 million shares to satisfy the phony debt, authorities said.

Next, he funneled those shares -- and the money from selling some of them -- to himself, family and friends, prosecutors said.

Knabb also had Pegasus file false reports with the Securities and Exchange Commission, stating that the wireless equipment maker had issued shares to satisfy a genuine debt, while hiding the fact that he and his associates had received the majority of those shares, authorities said.

Knabb, 44, of Wenatchee, Wash., was charged in January with one count each of securities fraud, conspiracy to commit securities fraud and falsifying books and records.

He pleaded guilty to all three charges, prosecutors said.

Haag described the defendant and his associates as people who "abuse their positions of trust to enrich themselves at the expense of company shareholders."

She added: "My office will continue vigorously to prosecute defendants ... like Mr. Knabb."

Knabb is scheduled to be sentenced on Nov. 3.

He faces a maximum of 45 years in prison and a possible fine of $50 million, plus restitution, prosecutors said.

Pegasus' former chief financial officer, Stephen Durland, 57, has pleaded guilty to the same charges. He is scheduled to be sentenced Sept. 8.

The guilty pleas were the culmination of a two-year FBI investigation, in which the SEC assisted, authorities said.

Source: http://www.mercurynews.com/breaking-news...

Shareholder Evidence Database: http://PegasusEvidence.4shared.com