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U.S. charges 14 over $147 mln New York boiler room scam
July 12, 2017 / 9:09 PM / 5 months ago

U.S. charges 14 over $147 mln New York boiler room scam

NEW YORK, July 12 (Reuters) - Federal prosecutors on Wednesday criminally charged 14 defendants with involvement in a $147 million stock manipulation scheme orchestrated in a Long Island, New York boiler room, and which swindled dozens of senior citizens and other investors.

Employees of My Street Research, based in Melville, New York, obtained shares at below-market prices from insiders of five public companies, and conducted wash trades and other manipulative trading to drive prices up, according to court papers and acting U.S. Attorney Bridget Rohde in the Eastern District of New York.

Victims were repeatedly pressured in cold calls and emails to buy shares and sign up for stock tips, and five defendants tried to launder $14.7 million of proceeds from the scheme, which ran from January 2014 to this month, prosecutors said.

One such email, for the company Grilled Cheese Truck Inc , said “URGENT!!! MUST WATCH THIS LINK REGARDING THE ‘GRILLED CHEESE TRUCK’” and provided a link to a Fox Business Channel video titled “Soup Nazi Hits the Road with New Food Trucks,” according to the nine-count indictment alleging securities fraud and various conspiracies.

In a related civil case against many of the same defendants, the U.S. Securities and Exchange Commission said one defendant told a victim unhappy about his losses: “I am tired of hearing from you. Do you have any rope at home? If so tie a knot and hang yourself or get a gun and blow your head off.”

Prosecutors said the defendants Erik Matz, 44, of Mt. Sinai, New York, and Ronald Hardy, 42, of Port Jefferson, New York, managed the alleged boiler room My Street Research, which was previously called Dacona Financial, Power Traders Press and Trade Masters Co.

Other defendants include cold callers, people involved with stock research, and insiders or marketers affiliated with Grilled Cheese Truck, CES Synergies Inc, Hydrocarb Energy Corp, Intelligent Content Enterprises Inc and National Waste Management Holdings Inc, prosecutors said.

Not all defendants were charged on each count. Efforts to obtain comment from a lawyer for Matz and Hardy were not immediately successful.

All defendants were expected to appear in federal courthouses in Brooklyn, California or Florida on Wednesday, prosecutors said. (Reporting by Jonathan Stempel in New York; Editing by Lisa Shumaker)

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