Spongetech Delivery Systems, Inc. (fka SPNGQ)

[shajandr]

"George Speranza, an independent consultant hired by Spongetech to market its products, admitted to prosecutors in May that he lied during a U.S. Securities and Exchange Commission investigation about helping the sponge-filled soap maker mislead shareholders with fake client websites. He copped to one count of perjury, and faces up to five years in prison.

Less than three weeks before his Oct. 17 sentencing trial, Speranza asked for leniency from the judge in a memorandum, calling himself an “unwitting dupe” in the company’s fraud. Spongetech hired him to set up virtual offices for supposed supplier-customers, but he didn’t know at the time the clients were all bogus, Speranza says.

“Mr. Speranza made an egregious error in not being truthful in his testimony to the SEC, but he was not a man engaged in an ongoing massive fraud or one with any motive to engage in covering up that fraud,” the memorandum said. “Moreover, it strains belief that Spongetech would confide [its] fraud to an outsider such as Mr. Speranza.”

The SEC and the U.S. Department of Justice filed parallel suits in May 2010 against Spongetech CEO Michael Metter and senior executive Steven Moskowitz, saying they touted millions of dollars in bogus sales orders to a handful of customers who never existed in order to drive up stock demand.

On Sept. 23, a New York magistrate judge recommended the court order Speranza to cough up $135,000 in civil restitution for lying to the SEC.

Speranza knowingly benefited from and contributed to the fraudulent sale of Spongetech’s securities by repeatedly aiding and abetting the misleading of Spongetech shareholders, U.S. Magistrate Judge Joan M. Azrack said.

Speranza denied such claims Thursday, saying in his memorandum that Moskowitz handed him a list of suppliers and asked him to set up websites where shareholders could contact them, on the pretense that the companies were being inundated with investor calls.

Speranza oversaw the website designs, using the company’s existing foreign supplier websites as a template and replacing the company names with the new supplier list given to him by Moskowitz, according to the memorandum."


http://www.law360.com/articles/275112/spongetech-consultant-wants-break-on-perjury-sentence