Replies to post #22590 on U.S Fuel Corp. (fka USFF)

[tom8oes]

Yeh......Maybe they wind up like these guys:

> SEC CHARGES SPONGETECH AND SENIOR EXECUTIVES IN PUMP-AND-DUMP SCHEME
>
> Washington, D.C., May 5, 2010 – The Securities and Exchange Commission
> today charged New York City-based Spongetech Delivery Systems Inc., an
> affiliate, and five people involved in a massive pump-and-dump scheme
> that deceived investors into believing they were buying stock in a
> highly successful company.
>
> The SEC alleges that Spongetech CEO Michael Metter and another senior
> executive, Steven Moskowitz, hyped fictional customers and grossly
> exaggerated sales figures through dozens of bogus press releases and
> fraudulent SEC filings to pump up demand for stock in Spongetech, a
> company that sells soap-filled sponges. After flooding the market with
> the false information to fraudulently inflate the stock price, Metter,
> Moskowitz, and Spongetech dumped approximately 2.5 billion shares by
> illegally selling them to the public through affiliated entities in
> unregistered transactions. They spent portions of their illicit
> profits in highly visible sponsorship deals with professional sports
> teams to further create the aura that Spongetech was a well-known and
> prosperous business.
>
> The SEC suspended trading in Spongetech stock on Oct. 5, 2009, due to
> questions about the accuracy of the company’s press releases and SEC
> filings. In today’s enforcement action, Spongetech is accused of
> obstructing the SEC’s investigation by producing phony sales documents
> in an attempt to legitimize the make-believe customers it hyped to the
> public. The U.S. Attorney’s Office for the Eastern District of New
> York today announced a parallel criminal action in the matter.
>
> “Spongetech used a menu of manipulative strategies to perpetuate this
> scheme, including fake sales orders and public statements as well as
> obstruction of the SEC’s investigation,” said Robert Khuzami, Director
> of the SEC’s Division of Enforcement. “We will utilize all available
> means, including referral to criminal authorities, to prosecute those
> who attempt to thwart our investigations.”
>
> Christopher Conte, Associate Director of the SEC’s Division of
> Enforcement, added, “Investors were deceived into believing that
> Spongetech was a successful business, while Spongetech and its senior
> executives were illegally dumping shares into the market.”
>
> Two of Spongetech’s former attorneys – Jack Halperin and Joel Pensley
> – and stock promoter George Speranza are also charged in the SEC’s
> complaint, which was filed in U.S. District Court for the Eastern
> District of New York. RM Enterprises International Inc., an affiliate
> through which Spongetech dumped shares, is also charged.
>
> According to the SEC’s complaint, after several years of relatively
> little business with a single customer comprising the bulk of
> Spongetech’s limited sales, Metter and Moskowitz began to paint a more
> promising and misleading picture of Spongetech’s business. Beginning
> in approximately April 2007, Spongetech issued dozens of phony press
> releases touting increasingly larger, yet fictitious, sales orders and
> revenue. The press releases fraudulently exaggerated the demand for
> pre-soaped sponges by referencing millions of dollars in sales orders,
> business, and revenue from five primary customers that purportedly
> accounted for 99 percent of Spongetech’s business, yet none of those
> customers actually existed.
>
> The SEC’s complaint alleges that Metter, Moskowitz, Spongetech, and RM
> Enterprises used false and baseless attorney opinion letters by
> Pensley and Halperin to distribute shares of Spongetech to the public.
> Metter, Moskowitz, and Spongetech also used false and misleading
> attorney opinion letters – forged in Pensley’s name and in the name of
> a fictitious lawyer, David Bomart – which were transmitted to
> Spongetech’s transfer agents. The SEC further alleges that Speranza
> created websites and rented unoccupied office space for the fictional
> customers in an attempt to legitimize them.
>
> The SEC’s complaint alleges that Spongetech violated Sections 5(a),
> 5(c) and 17(a) of the Securities Act of 1933 and Sections 10(b),
> 13(a), 13(b)(2)(A), 13(b)(2)(B), and 15(d) of the Securities Exchange
> Act of 1934 and Exchange Act Rules 10b-5, 12b-20, 13a-13, 15d-1,
> 15d-11, and 15d-13. The complaint alleges that RM Enterprises violated
> Sections 5(a), 5(c), and 17(a) of the Securities Act, Section 10(b) of
> the Exchange Act and Exchange Act Rule 10b-5. The SEC alleges Metter
> and Moskowitz violated Sections 5(a), 5(c), and 17(a) of the
> Securities Act, Sections 10(b) and 13(b)(5) of the Exchange Act,
> Exchange Act Rules 10b-5, 13b2-1, 13b2-2 (Moskowitz only), and 15d-14,
> and Section 304 of the Sarbanes-Oxley Act of 2002, and aided and
> abetted Spongetech’s violations of Sections 13(a), 13(b)(2)(A), 13(b)
> (2)(B), and 15(d) of the Exchange Act and Exchange Act Rules 12b-20,
> 13a-13, 15d-1, 15d-11, and 15d-13. The SEC further alleges Speranza
> violated Section 10(b) of the Exchange Act and Exchange Act Rule
> 10b-5, and aided and abetted violations of Sections 10(b) of the
> Exchange Act and Exchange Act Rule 10b-5. The Commission also alleges
> Pensley and Halperin violated Sections 5(a), 5(c), and 17(a) of the
> Securities Act, Section 10(b) of the Exchange Act, and Exchange Act
> Rule 10b-5.
>
> The SEC thanks the U.S. Attorney’s Office for the Eastern District of
> New York, the Federal Bureau of Investigation, the Internal Revenue
> Service, and the Financial Industry Regulatory Authority for their
> assistance in this matter. The SEC’s investigation is continuing.
>
> # # #
>
> For more information about this enforcement action, contact:
>
> Christopher Conte
> Associate Director, SEC Division of Enforcement
> [phone]