Six Arrested In Massive Security Fraud Scheme
NEW YORK (AP) _ Six people, including a former Securities and Exchange Commission attorney, were charged Friday in a securities fraud scheme involving two publicly traded companies, authorities said Friday.
The indictment arose out of an investigation into broadcasts by Dan Dorfman, a financial commentator on the CNBC cable channel, that favored the two companies involved in the case and quoted one of the defendants, The New York Times said. Dorfman was not named in the indictment.
Three defendants were charged with issuing millions of shares of discounted stock _ either in the names of fictitious people, real people unaware that the stock was being issued in their names, or people acting under their direction.
The discounted stock _ some obtained for as little as a dime _ was then funneled into accounts shared by the defendants in Canada and Britain and later sold at prevailing stock market prices, the indictment said.
Friday’s indictment charges Grant Curtis, 36, Leo Mangan, 40, and Tim Masley, 35, with secretly controlling the two companies; Comprehensive Environmental Systems, Inc., based in West Babylon, and Alter Sales Co., Inc., based in Lighthouse Point, Fla. Both companies trade on the Nasdaq stock market. Ray Irangy, 50, and Pedro Gomez, 37, allegedly took orders from the three men.
The group also hired James Nearen _ who had worked as a SEC lawyer for seven years _ as a ``regulatory consultant.″ Nearan was accused of giving the other defendants information he had learned while at the commission, and working to help them avoid being caught in the fraud.