Massachusetts Federal Court Sentences Defendant in SEC Microcap Manipulation Case to 42 Months Imprisonment
U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23576 / June 21, 2016
Securities and Exchange Commission v. Michael Affa, et al., No. 14-cv-12959 (D. Mass. filed July 11, 2014)
United States v. Mitchell Brown, Nos. 1:14-cr-10221 and 1:14-cr-10297 (D. Mass.)
Massachusetts Federal Court Sentences Defendant in SEC Microcap Manipulation Case to 42 Months Imprisonment
The Securities and Exchange Commission announced that on June 20, 2016, a federal court in Boston, Massachusetts sentenced Mitchell H. Brown, of Long Branch, New Jersey, to 42 months in prison and 3 years of supervised release, and ordered him to pay a fine of $1 million in two separate criminal cases. Brown also was ordered to pay restitution of $ 420,643. Brown pleaded guilty in September 2015 to conspiracy, securities fraud and wire fraud for his participation with four other defendants in a pump-and-dump scheme in the securities of Boston-based Amogear Inc. and in December 2015 for his participation in another pump-and-dump scheme.
The criminal case was announced the same day as SEC fraud charges against Brown and the other four defendants for attempting to manipulate shares of Amogear that was caught by an FBI undercover operation. According to the SEC's complaint filed in federal court in Boston, the defendants knew that Amogear was a shell company without any real operations but schemed to boost its price and profit by selling their own shares. What the defendants did not know was that the FBI controlled Amogear and used it to obtain evidence of attempted stock manipulation. To protect investors, the SEC suspended trading in Amogear's securities on February 10, 2014 as the attempted stock manipulation was underway.
In March 2016, the federal court in the SEC's case entered judgments by consent against all five defendants, enjoining them from violating Section 17(a)(1) and (3) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5(a) and (c) thereunder, and prohibiting them from participating in any offering of penny stock, pursuant to Section 21(d)(6) of the Exchange Act.
Michael A. Affa, one of Brown's co-defendants, also was charged criminally and was sentenced in February 2016 to 33 months in prison and ordered to pay a fine of $1 million; the other defendants await sentencing.
For further information, see Litigation Release Nos. 23495 (Mar. 23, 2016), 23469 (Feb. 17, 2016), Press Release No. 2014-135 (July 11, 2014), and Exchange Act Release No. 71514 (Feb. 10, 2014).
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 # Docket Text
06/22/2016 192 Judge William G. Young: ORDER entered. STATEMENT OF REASONS as to Mitchell Brown. (Gaudet, Jennifer) (Entered: 06/29/2016)
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 represented 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 TERMINATED: 06/22/2016 also known as Mitchell H. Brown TERMINATED: 06/22/2016 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) The defendant is committed to the custody of BOP for 42 months on each count, each count to run concurrently with each other and with term imposed in case 15-cr-10297-WGY. Three years of supervised release with standard and special conditions. $900 total special assessment (combined with 15-cr-10297). $1 Million fine. 15:78j(b), 78(ff); 17 C.F.R. SEC. 240.10b5; AND 18:2...SECURITIES FRAUD (2) The defendant is committed to the custody of BOP for 42 months on each count, each count to run concurrently with each other and with term imposed in case 15-cr-10297-WGY. Three years of supervised release with standard and special conditions. $900 total special assessment (combined with 15-cr-10297). $1 Million fine. 18:1343, 1349, AND 2...WIRE FRAUD (3-7) The defendant is committed to the custody of BOP for 42 months on each count, each count to run concurrently with each other and with term imposed in case 15-cr-10297-WGY. Three years of supervised release with standard and special conditions. $900 total special assessment (combined with 15-cr-10297). $1 Million 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 (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 617-748-3105 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
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