Vancouver-linked fraudster Ed Durante has asked a New York judge to impose a sentence no longer than 11-1/2 years on him for an $11-million pink sheets manipulation. (All figures are in U.S. dollars.) He says that at his age, 64, anything longer would amount to spending the rest of his life in prison. He also cites his co-operation with prosecutors.
Mr. Durante is awaiting sentencing for a scheme in which he and others manipulated a pink sheets listing called VGTel Inc. He told investors that the stock could go to $50. Then, with the help of others, he convinced a group of mostly unsophisticated investors to buy millions of dollars worth of shares. Mr. Durante pleaded guilty to charges that included conspiracy, securities fraud and money laundering on Aug. 23, 2016, and is in jail while he awaits sentencing.
One of the factors at sentencing will be Mr. Durante's prior criminal record, which traces back to Vancouver. He previously served 10 years in jail for the manipulation of another company, Wamex Holdings Inc. In that scheme, he boosted the stock to $19.50 from $1.375 through massive promotional campaigns and heavy trading through offshore entities. Former Vancouver brokerage Union Securities Ltd. figured into the scheme, with its White Rock branch handling some of Mr. Durante's orders.Based on the Wamex conviction and other factors, sentencing guidelines specify a jail term of 24 to 30 years for the VGTel fraud. As Mr. Durante sees things, that is entirely too long. In a sentencing submission filed on June 26, 2017, he asks that the judge impose a term of no longer than 140 months, or just over 11-1/2 years.
Mr. Durante says that a term of 24 to 30 years would be greater than necessary, given his efforts to help the government. He says that he provided prosecutors with a computer he had stored in Belarus, with which he was able to identify other manipulated stocks and provide names of those associated with those stocks. He did so despite the fact that the government would not offer him any credit for co-operating.
Age is another factor that, as Mr. Durante sees things, should work in his favour. At 64, the guidelines sentence would see him more likely to die in jail than be released. He says that would be a fate out of line with his crimes. The term he suggests, of 11-1/2 years, would still leave him in jail while into his seventies.
Prosecutors have yet to file their sentencing memorandum.
The charges against Mr. Durante are contained in parallel civil and criminal actions filed on Jan. 6, 2016, by the U.S. Securities and Exchange Commission and New York prosecutors. According to the SEC, Mr. Durante began plotting the VGTel scheme before he had even completed his prison term for the Wamex Holdings fraud. In 2009, from prison, he began negotiating the acquisition of VGTel as a shell.
After his release from prison, Mr. Durante moved to New York and adopted several aliases to conceal his criminal past, the SEC said. These names included Ted Wise, Anthony Walsh and Efran Eisenberg. He also started selling shares of VGTel to unsophisticated investors, telling them that he had several major deals and large investments for the company, the complaint stated.
As part of the scheme, Mr. Durante paid a broker who persuaded several clients to invest in VGTel. The clients were mostly conservative, older investors, who owned annuities, the SEC said. Through presentations and other contact with those clients, Mr. Durante (using the Ted Wise alias) told them that VGTel would be a profitable investment. In some instances, investors wrote cheques directly to entities that Mr. Durante controlled. At the same time, Mr. Durante paid the broker $377,500 to buy her business and a further $110,000 in kickbacks, according to the complaint.
In support of the scheme, Mr. Durante directed manipulative trades, boosting the stock to $1.90 from 25 cents, according to the SEC. The trades, as described in the complaint, involved Mr. Durante executing several matched orders. (VGTel, which reached $1.90 on Oct. 24, 2013, quickly fell off and was trading below 10 cents a year later. It was last at 0.04 cent.) The SEC said that Mr. Durante defrauded investors of at least $11-million.
For Mr. Durante, the charges brought an end to a life of luxury that began upon his release for the Wamex fraud. According to court filings in a separate case the SEC filed to collect an unpaid fine, Mr. Durante went on a $51,000 trip to Paris right after he completed his Wamex sentence. Among his expenses were $14,585 for a three-night stay at the five-star Hotel Meurice and $7,000 from a clothing store called D&G. He was also living in a $7,644-per-month New York apartment, the regulator said. Mr. Durante has been in U.S. custody since Dec. 18, 2015, when the government had him extradited from Germany.
The other defendants in the case are financial advisers Sheik Khan and Larry Werbel, who accepted bribes from Mr. Durante. Also charged was Christopher Cervino, a New Jersey broker who carried out matched trades as part of the scheme. A jury convicted Ms. Khan and Mr. Cervino, while Mr. Werbel pleaded guilty. They await sentencing.
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