Mr. Ricci, the host of the Halloween party, picked up Mr. Mangiapane, Mr. Brown and Mr. Dynkowski from the airport in Costa Rica, and the four men drove to a bar where they met with Jonathan Curshen, the owner of Red Sea Management, who dropped by with friends to welcome them to Costa Rica. At about midnight, Mr. Mangiapane, Mr. Brown and Mr. Dynkowski checked into separate rooms at the Intercontinental Hotel in San Jose, Costa Rica. See Exhibit 32; American Express Statement.
.................On Sunday, October 29, 2006, Messrs. Curshen, Dynkowski, Brown and Mangiapane had lunch at the Machu Picchu restaurant in San Jose, Costa Rica.
Doc 54 OCR extract - Part 2
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Re: Securities and Exchange Commission v. Bruce Grossman and Jonathan Curshen, 11-Sep-08 05:29 pm =DJ UPDATE: IN THE MONEY:Sting Leads To Arrest Of 2 Stk Promoters
Thursday, September 11, 2008 5:10 PM
(Updated to add details of SEC action in the final paragraph.)
By Carol S. Remond
A DOW JONES NEWSWIRES COLUMN
A Federal Bureau of Investigation sting operation resulted in the arrest of two Costa Rica-based stock promoters accused of conspiring to commit securities fraud.
One of the men, Jonathan Curshen, was arrested on Sept. 4 and has been released on bail. The other, Bruce Grossman, was arrested on Sept. 5 in New Orleans and remains in jail.
According to a sealed complaint, Curshen and Grossman conspired to bribe brokers who would enter in arranged transactions through which the men would sell securities they owned at pre-determined prices.
The complaint, filed in the U.S. district Court for the Southern District of New York, shows that, unbeknown to them, the men were dealing with an undercover FBI special agent who purported to represent a group of registered brokers willing to purchase stock in client accounts over which they had control.
The FBI used an undercover trading account at a New York City brokerage firm to purchase stock in Washington-based Industrial Biotechnology Corp. (IBOT) in pre-arranged transactions with Grossman and Curshen.
Between June 27 and July 2, the FBI spent about $76,000 purchasing Industrial Biotechnology stock that the two men arranged to sell to purported customers of stockbrokers working with the undercover FBI agent who arranged the transactions with Grossman and Curshen.
In exchange, according to the complaint, the defendants wired $19,000 to an undercover FBI bank account as kickback to the undercover FBI agent and the brokers for having arranged the transactions.
The wired money came from an account in the name of Sentry Global Securities Limited in San Jose, Costa Rica.
According to the complaint, Curshen and the undercover FBI agent agreed on July 22 that the special agent would purchase $2.5 million worth of Industrial Biotechnology stock over the next three months. Under the deal, the agent would receive 25% of the proceeds of the amount of stock purchased by the "customers" of the brokers the agent purported to represent.
According to the complaint, the agent told the men he kept 5% of the bribe and would distribute 20% to the brokers who kept the payoff secret from their customers.
Curshen and Grossman were charged by complaint and the government has 30 days to indict them.
Anthony Lombardino, a lawyer for Curshen, said he is hoping that the matter can be resolved without an indictment. A lawyer for Grossman couldn't be reached.
The two men were also charged in a complaint filed by the Securities and Exchange Commission on Wednesday, also in the Southern District Court of New York. The SEC is seeking to enjoin Curshen and Grossman from further securities violations and to have them disgorge their ill gotten gains.
(Carol S. Remond, a special writer on the In The Money team, is an award-winning columnist who won a Gerald Loeb Award in 2005 for best news service content with "Exposing Small-Cap fraud," a series of articles that described how three small companies unscrupulously pumped up their stocks. She can be reached at 303-997-5783 or by e-mail: carol.remond@dowjones.com)
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