BROOKLYN, NY—Yesterday, Cecil Franklin Speight, also known as Frank Speight, pleaded guilty to conspiracy to commit mail fraud and securities fraud for engaging in a conspiracy to steal over three million dollars from investors. Speight was the sole owner, officer, and director of International Stock Transfer (IST), a registered transfer agent with the United States Securities and Exchange Commission (SEC) since May 2004. According to court filings and facts presented at the plea hearing, Speight stole at least $3.3 million from victim investors and used the proceeds to pay personal expenses, including purchases at Mercedes Benz, Nordstrom, Netflix, and Groupon. Speight faces up to five years’ imprisonment, at least $3.3 million in restitution, and a fine equal to double the investors’ losses.
The guilty plea was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI).
“Rather than transferring capital to issuers, the defendant used the investors’ funds as his own, including financing his lifestyle in Florida. His victims, from the Eastern District of New York and around the world, were conned into buying bogus securities that were not worth the paper they were printed on. Now, he will be held to account for his crimes,” stated United States Attorney Lynch. Ms. Lynch extended her grateful appreciation to the Federal Bureau of Investigation, the agency responsible for leading the government’s investigation, and thanked the Securities and Exchange Commission for its assistance.
“Speight tricked his victims into thinking their money would be invested in high-yield securities, but he was essentially using their investments to fund his own lifestyle to the tune of several million dollars. People have the right to trade in an uncorrupted market, and today’s guilty plea is proof of the FBI’s continued determination to root out those who unlawfully interfere with this process,” stated FBI Assistant Director-in-Charge Venizelos.
IST was founded by Speight in 2004 as a transfer agent registered with the SEC with offices in Palm Beach, Florida. Speight used “cold callers” and other means to entice victims into investing their money in allegedly high yield securities. Speight promised the victims a high rate of return if they invested in securities that were purportedly associated with IST. Speight and his coconspirators directed the victims to wire their investment funds into purportedly secure attorney escrow accounts. Once the victims wired money to those escrow accounts, Speight typically stole the funds for his personal use, including the purchase of a Mercedes Benz automobile. Speight also withdrew over $350,000 of investors’ funds in cash.
Today’s guilty plea took place before United States Magistrate Judge Roanne L. Mann at the federal courthouse in Brooklyn, N.Y.
The government’s case is being prosecuted by Assistant United States Attorney Jack Dennehy.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency task force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
The Defendant: CECIL FRANKLIN SPEIGHT Age: 53 West Palm Beach, FL
1. International Stock Transfer and Trust, Inc. ("IST") was a Florida corporation incorporated in 2004, with an office in Palm Beach, Florida. From March 22, 2004 through June 2013, IST was registered with the United States Securities and Exchange Commission ("SEC") as a transfer agent. In general terms, a transfer agent is an entity that is assigned by a corporation to maintain records of its investors, account balances and transactions, to cancel and issue certificates and to process investor mailings. Typically, a transfer agent will forward money received from investors to the issuer of the securities being sold.
2. The defendant CECIL FRANKLIN SPEIGHT, also known as "Frank Speight," was a resident of Palm Beach, Florida. SPEIGHT was the sole owner, director and officer of IST from its incorporation in 2004 until its voluntary dissolution in June 2013.
3. Altmark Holdings, Ltd. ("Altmark") was an entity registered and headquartered in Turks & Caicos. In or about 2007, Altmark issued a series of high-yield bonds that were purportedly backed by mineral reserves and oil or gas rights. The series was held, in electronic form, in various accounts of participants in the Depository Trust Company ("DTC"), which is a registered clearing agency with the SEC. The Altmark bonds were issued a number by the Committee on Uniform Securities Identification Procedures ("CUSIP") that was registered to Altmark. A CUSIP number identifies most securities and is unique to each one. The bonds traded for a time on the Berlin Exchange, and IST was the registered transfer agent in 2007, responsible for paying interest to investors. Since June 2007, Altmark has never made an interest payment on these bonds.
4. Adfitech, Inc. ("Adfitech") was a Delaware corporation whose common stock was traded on the Over the Counter ("OTC") market and quoted under the trading symbol "ADFT."
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