11. Small, privately held United States corporate entities could issue shares of stock, including freely traded shares which were considered “over-the-counter” trades, and which were reported on the “over-the-counter” bulletin board (“OTCBB”)or “pink sheets”. The OTCBB and pink sheets were quotation mediums that contained quotations for thousands of over-the-counter stocks not listed on any of the major stock markets. Shares which had values considerably less than a dollar per share were sometimes referred to as “penny stock.”
12. Small, privately held corporate entities could also issue restricted shares, which could not be freely traded, including so- called “Reg S” shares, that is, sales of shares restricted to purchasers outside of the United States. The sales of restricted shares were not reported on the “over the counter” bulletin board or “pink sheets.” Restricted shares had a value far less than that of freely traded shares.
13. JONES and WROBEL ran a telemarketing operation, sometimes referred to as a “boiler room”, from a number of locations in Barcelona, Spain. In this operation, callers contacted prospective investors by telephone to sell “over the counter” or “pink sheet” stocks, using high pressure sales tactics and fraudulent statements and representations. The boiler room used a variety of names, beginning with Newbridge International, then Brecon Global, then Strategic Energy Partners, and then Hammerson Equity Group.
14. The boiler room obtained shares of restricted stock issued by various companies, including Intersecurity Holdings Corporation (“IXSV”); Universal Energy Corporation (“UVEC”); Rhino Outdoor International, later known as Xtreme Motorsports International (“RHOI” and “XTMS”); and Clean Coal Technologies, Inc. (“CCTI” or “CCTC”), which were sold to investors without disclosing the fact that the shares were restricted and leading the investors to believe that the shares were freely traded shares.
15. The boiler room also sold shares of Green Energy Live (“GELV”), without ever obtaining those shares.
16. FOLAND was instrumental in identifying shares of stock to sell to the boiler room.
17. KLEIN served as an escrow agent for stock transfers to the boiler room.
18. COLE, CLAYTON, CHURCH and MALIZIO worked in Barcelona, Spain at the boiler room operated by WROBEL and JONES.
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