The Securities and Exchange Commission announced that the federal court in Boston, Massachusetts today entered judgments by consent against Andrew J. Affa, Michael A. Affa, Mitchell H. Brown, Christopher R. Putnam, and Christopher G. Nix in a fraud action that was filed in July 2014. The fraud involved an attempt to manipulate shares of Boston, Massachusetts-based Amogear Inc. that was caught by an FBI undercover operation.
U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23495 / March 23, 2016
Securities and Exchange Commission v. Michael Affa, Andrew Affa, Mitchell Brown, Christopher Putnam, and Christopher Nix, Civil Action No. 14-cv-12959 (D. Mass. July 11, 2014)
Judgments Entered Against Five Defendants in Microcap Manipulation Scheme
The Securities and Exchange Commission announced that the federal court in Boston, Massachusetts today entered judgments by consent against Andrew J. Affa, Michael A. Affa, Mitchell H. Brown, Christopher R. Putnam, and Christopher G. Nix in a fraud action that was filed in July 2014. The fraud involved an attempt to manipulate shares of Boston, Massachusetts-based Amogear Inc. that was caught by an FBI undercover operation.
All five defendants were permanently enjoined from violating the securities antifraud statutes and barred from participating in offerings of penny stock.
The Commission's complaint alleged that defendants knew that Amogear was a shell company without any real operations, but schemed from at least August 2012 to February 2014 to boost the price of its securities and profit by selling their own shares. The planned scheme involved artificially inflating the price of Amogear stock by, among other things, a) issuing news releases and/or promotional materials containing false or exaggerated information, b) generating mass emails containing false or exaggerated information, and c) engaging in undisclosed coordinated trading of the stock, all designed to generate the appearance of demand for the stock and to increase the price of the stock. The next stage of the scheme was planned to be the sale of the stock at artificially high prices to unsuspecting investors. What the defendants did not know was that the FBI controlled Amogear and used it to obtain evidence of attempted stock manipulation. On February 10, 2014, the SEC temporarily suspended trading in Amogear's securities as the attempted stock manipulation was underway.
The judgments in the Commission's action permanently enjoin all defendants from violating Section 17(a)(1) and (3) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 (the "Exchange Act") and Rule 10b-5(a) and (c) thereunder. The judgments also prohibit all five defendants from participating in any offering of penny stock, pursuant to Section 21(d)(6) of the Exchange Act.
In a parallel criminal action prosecuted by the Massachusetts U.S. Attorney's Office, all five defendants have entered guilty pleas to one count of conspiracy to commit securities fraud and wire fraud, one count of securities fraud, and five counts of wire fraud. Michael Affa was sentenced on February 12, 2016; the other defendants await sentencing.
For further information, see Litigation Release Nos. 23469 (Feb. 17, 2016) (M. Affa sentencing) and 23041 (July 11, 2014) (complaint).
1:14-cr-10221-WGY USA v. Affa et al 1:14-cr-10221-WGY-1 Michael Affa 1:14-cr-10221-WGY-2 Andrew Affa 1:14-cr-10221-WGY-3 Mitchell Brown 1:14-cr-10221-WGY-4 Christopher Putnam 1:14-cr-10221-WGY-5 Christopher Nix
Date Filed # Docket Text
04/07/2016 179 NOTICE is hereby given that an official transcript of a proceeding has been filed by the court reporter in the above-captioned matter. Counsel are referred to the Court's Transcript Redaction Policy, available on the court website at http://www.mad.uscourts.gov/attorneys/general-info.htm (Scalfani, Deborah) (Entered: 04/07/2016)
04/07/2016 178 Transcript of Sentencing Hearing as to Michael Affa held on February 12, 2016, before Judge William G. Young. Court Reporter Name and Contact Information: Richard Romanow at bulldog@richromanow.com The Transcript may be purchased through the Court Reporter, viewed at the public terminal, or viewed through PACER after it is released. Redaction Request due 4/28/2016. Redacted Transcript Deadline set for 5/9/2016. Release of Transcript Restriction set for 7/6/2016. (Scalfani, Deborah) (Entered: 04/07/2016)
04/04/2016 177 ELECTRONIC NOTICE OF RESCHEDULING as to Mitchell Brown. Sentencing reset for 5/2/2016 02:00 PM in Courtroom 18 before Judge William G. Young. (Gaudet, Jennifer) (Entered: 04/04/2016)
04/01/2016 176 Judge William G. Young: ORDER entered: The travel is approved as to Andrew Affa re 175 Letter. (Paine, Matthew) (Entered: 04/01/2016)
03/28/2016 175 Letter (non-motion) regarding PERMISSION TO TRAVEL as to Andrew Affa (Losquadro, Steven) (Entered: 03/28/2016)
United States District Court District of Massachusetts (Boston)
CRIMINAL DOCKET FOR CASE #: 1:14-cr-10221-WGY All Defendants Case title: USA v. Affa et al
Magistrate judge case numbers: 1:14-mj-01051-RBC 1:14-mj-01052-RBC 1:14-mj-01053-RBC 1:14-mj-07112-JCB
Date Filed: 07/23/2014 Assigned to: Judge William G. Young
Defendant (1) Michael Affa TERMINATED: 02/19/2016 also known as Michael A. Affa TERMINATED: 02/19/2016 represented by Robert M. Goldstein 20 Park Plaza, Suite 1000 Boston, MA 02116 617-742-9015 Fax: 617-742-9016 Email: rmg@goldstein-lawfirm.com LEAD ATTORNEY ATTORNEY TO BE NOTICED Designation: Retained
Pending Counts Disposition 18:371...CONSPIRACY TO COMMIT SECURITIES FRAUD AND WIRE FRAUD (1) The defendant is sentenced to 33 months in custody of Bureau of Prisons on each count, each count to run concurrently with each other, to be followed by 36 months of supervised release with standard and special conditions. $700 special assessment. $1,000,000 fine. 15:78j(b), 78(ff); 17 C.F.R. SEC. 240.10b5; AND 18:2...SECURITIES FRAUD (2) The defendant is sentenced to 33 months in custody of Bureau of Prisons on each count, each count to run concurrently with each other, to be followed by 36 months of supervised release with standard and special conditions. $700 special assessment. $1,000,000 fine. 18:1343, 1349, AND 2...WIRE FRAUD (3-7) The defendant is sentenced to 33 months in custody of Bureau of Prisons on each count, each count to run concurrently with each other, to be followed by 36 months of supervised release with standard and special conditions. $700 special assessment. $1,000,000 fine.
Highest Offense Level (Opening) Felony
Terminated Counts Disposition None
Highest Offense Level (Terminated) None
Complaints Disposition 18:371 - CONSPIRACY Assigned to: Judge William G. Young
Defendant (2) Andrew Affa also known as Andrew J. Affa epresented by Steven E. Losquadro 649 Route 25A Suite 4 Rocky Point, NY 11778 631-744-9070 Fax: 631-744-9421 Email: losquadrolaw@aol.com LEAD ATTORNEY PRO HAC VICE ATTORNEY TO BE NOTICED Designation: Retained
William H. Connolly Law Offices of William H. Connolly 20 Park Plaza Suite 1000 Boston, MA 02210 617-542-0200 Email: whc@williamconnollylaw.com ATTORNEY TO BE NOTICED Designation: Retained
Pending Counts Disposition 18:371...CONSPIRACY TO COMMIT SECURITIES FRAUD AND WIRE FRAUD (1) 15:78j(b), 78(ff); 17 C.F.R. SEC. 240.10b5; AND 18:2...SECURITIES FRAUD (2) 18:1343, 1349, AND 2...WIRE FRAUD (3-7)
Highest Offense Level (Opening) Felony
Terminated Counts Disposition None
Highest Offense Level (Terminated) None
Complaints Disposition 18:371 - CONSPIRACY Assigned to: Judge William G. Young
Defendant (3) Mitchell Brown also known as Mitchell H. Brown represented by Richard Roth The Roth Law Firm, PLLC 295 Madison Avenue Floor 22 New York, NY 10017 (212) 542-8882 Fax: (212) 542-8883 Email: rich@rrothlaw.com LEAD ATTORNEY PRO HAC VICE ATTORNEY TO BE NOTICED Designation: Retained
Danielle Pomeraniec The Roth Law Firm, PLLC 295 Madison Avenue Floor 22 New York, NY 10017 (212) 542-8882 Fax: (212) 542-8883 Email: danielle@rrothlaw.com TERMINATED: 06/01/2015 PRO HAC VICE ATTORNEY TO BE NOTICED Designation: Retained
Robert S. Messinger Nystrom Beckman & Paris LLP One Marina Park Drive, 15th Flr. Boston, MA 02210 617-778-9104 Fax: 617-778-9110 Email: robert.messinger@gmail.com ATTORNEY TO BE NOTICED Designation: Retained
Pending Counts Disposition 18:371...CONSPIRACY TO COMMIT SECURITIES FRAUD AND WIRE FRAUD (1) 15:78j(b), 78(ff); 17 C.F.R. SEC. 240.10b5; AND 18:2...SECURITIES FRAUD (2) 18:1343, 1349, AND 2...WIRE FRAUD (3-7)
Highest Offense Level (Opening) Felony
Terminated Counts Disposition None
Highest Offense Level (Terminated) None
Complaints Disposition 18:371 - CONSPIRACY Assigned to: Judge William G. Young
Defendant (4) Christopher Putnam also known as Christopher R. Putnam represented by Joshua Robert Hanye Federal Public Defender's Office 5th Floor 51 Sleeper Street Boston, MA 02210 617-223-8061 Email: joshua_hanye@fd.org LEAD ATTORNEY ATTORNEY TO BE NOTICED Designation: Public Defender or Community Defender Appointment
Pending Counts Disposition 18:371...CONSPIRACY TO COMMIT SECURITIES FRAUD AND WIRE FRAUD (1) 15:78j(b), 78(ff); 17 C.F.R. SEC. 240.10b5; AND 18:2...SECURITIES FRAUD (2) 18:1343, 1349, AND 2...WIRE FRAUD (3-7)
Highest Offense Level (Opening) Felony
Terminated Counts Disposition None
Highest Offense Level (Terminated) None
Complaints Disposition 18 U.S.C. § 371 Conspiracy to Commit Securities Fraud. Assigned to: Judge William G. Young
Defendant (5) Christopher Nix also known as Gabe Nix also known as Christopher G. Nix represented by Jonathan L. Kotlier Nutter, McClennen & Fish, LLP Seaport West 155 Seaport Boulevard Boston, MA 02210-2604 617-439-2000 Fax: 617-310-9683 Email: jkotlier@nutter.com LEAD ATTORNEY ATTORNEY TO BE NOTICED Designation: Retained
Andrew R. McArdell Nutter, McClennen & Fish, LLP Seaport West 155 Seaport Boulevard Boston, MA 02210-2604 617-439-2339 Email: amcardell@nutter.com ATTORNEY TO BE NOTICED Designation: Retained
Pending Counts Disposition 18:371...CONSPIRACY TO COMMIT SECURITIES FRAUD AND WIRE FRAUD (1) 15:78j(b), 78(ff); 17 C.F.R. SEC. 240.10b5; AND 18:2...SECURITIES FRAUD (2) 18:1343, 1349, AND 2...WIRE FRAUD (3-7)
Plaintiff USA represented by Eric A. Forni United States Attorney's Office MA Suite 9200 1 Courthouse Way Boston, MA 02210 617-573-8827 Email: eric.forni@usdoj.gov LEAD ATTORNEY ATTORNEY TO BE NOTICED Designation: Assistant US Attorney
Vassili Thomadakis US Attorney's Office - MA J. Joseph Moakley U.S. Courthouse 1 Courthouse Way Suite 9200 Boston, MA 02210 617-748-3248 Email: vassili.thomadakis@usdoj.gov LEAD ATTORNEY ATTORNEY TO BE NOTICED Designation: Assistant US Attorney
Andrew J. Palid Securities and Exchange Commission - MA 33 Arch Street 23rd Floor Boston, MA 02110-1424 (617) 573-4540 Email: palida@sec.gov ATTORNEY TO BE NOTICED