Time for an update on the folks who ran SpongeTech Delivery Systems, one of the more audacious frauds of recent years. The feds say that Chief Executive Michael Metter and Chief Operating Officer Steven Moskowitz faked 99% of the sponge sales of the New York-based company, and pocketed millions by selling shares to gullible investors at inflated prices. The executives were charged with securities fraud, conspiracy, obstructing justice, conspiracy to launder money and perjury.
Earlier this month, Mr. Moskowitz pleaded guilty to securities fraud, according to a spokesman for the U.S. Attorney's office in Brooklyn. The other charges appear to have been dropped. But it's hard to know what exactly happened, because a federal judge sealed the plea agreement. Mr. Moskowitz is most likely cooperating in the case against the five remaining defendants, including Mr. Metter.
Miranda Fritz, Mr. Metter's lawyer, said she's unhappy that the plea was sealed and baffled as to why the government didn't insist on Mr. Moskowitz's pleading guilty to perjury.
Prosecutors may feel Mr. Moskowitz is an especially helpful witness in the SpongeTech case, and perhaps others. Who knows, maybe he provided information about the unsolved case of two Russian penny-stock promoters found murdered execution-style in a Colts Neck, N.J., mansion in 1999. The promoters had been touting the stock of a company put together by two former SpongeTech employees who are defendants in the fraud case.
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