International Fugitive And Disbarred Attorney Charged In Over $5 Million Cryptocurrency Fraud (DOJ Release)SEC Charges Motion Picture Financier with Fraud (SEC Release)SEC Charges Charter School Operator and its Former President With Fraudulent Municipal Bond Offering (SEC Release)SEC Obtains $15 Million Judgment Against Mastermind of Market Manipulation and Unlawful Stock Distribution Scheme (SEC Release)
The charges against LEVINE and REICHENTHAL involve two fraudulent schemes. In the first fraudulent scheme, in approximately June and July 2018, LEVINE induced another individual, the principal of a purported cryptocurrency escrow firm ("Individual-1"), to wire to REICHENTHAL over $3 million of funds from an over-the-counter cryptocurrency broker ("Company-1") to fund the purchase of Bitcoin after falsely telling Individual-1 that LEVINE would sell thousands of Bitcoin, when in truth and in fact, LEVINE never intended to sell Bitcoin. After receiving the $3 million, REICHENTHAL, in turn, wired over $2 million to bank accounts in Guatemala held in the name of one of LEVINE's aliases. LEVINE then lied to Individual-1 for days about why the deal had not worked out, the status of the purported Bitcoin, and the location of Company-1's money, which was never returned.In the second fraudulent scheme, from approximately February 2019 to May 2019, LEVINE induced a Florida resident involved in brokering Bitcoin transactions ("Individual-2") to cause investors to send to REICHENTHAL over $2 million of the investors' money to fund the purchase of Bitcoin. Again, LEVINE told Individual-2 that LEVINE would sell Bitcoin, when in truth and in fact, LEVINE never had any intention of selling Bitcoin to the investors. After receiving the funds from the investors, REICHENTHAL, in turn, sent over $1.9 million to bank accounts in Mexico controlled by LEVINE; the money was then wired to a bank account in Russia held in the name of one of LEVINE's aliases. LEVINE then lied to Individual-2 and an investor ("Investor-1") about the status of the investors' funds, which were never returned. After Individual-2 sought the return of the funds, LEVINE sent one electronic message threatening to "bring [Individual-2] into all My Legal Problems here in Guatemala including Money Laundering as I have open investigation a d [sic] I will alert the American Authorities you were involved in my operations before just to stick it up your a**."In connection with the above transactions, LEVINE used, among other things, various false aliases to communicate with the individuals sending funds to REICHENTHAL and foreign bank accounts held in his false names. REICHENTHAL used bank accounts held in the name of his law firm and an attorney trust account to receive the funds and the pass them to LEVINE, before he or investors received the Bitcoin, contrary to REICHENTHAL's and LEVINE's promises.On or about October 31, 2019, the Supreme Court of the State of Florida granted REICHENTHAL's own petition for voluntary disciplinary revocation of his bar license after approximately 12 attorney disciplinary charges were filed against him related to his "receipt of approximately $2,125,000.00 in escrow funds and subsequent failure to disburse in accordance with the escrow agreement," as stated in the court documents.
[C]hase, through his company Knightsbridge Entertainment, Inc., sold over $62 million in high-yield, short-term promissory notes to approximately 100 investors. According to the complaint, Chase, then a California resident, told investors that their funds would be allocated to provide short-term, post-production financing to motion picture companies. However, as alleged in the complaint, Chase used the majority of the funds for purposes unrelated to movie financing. Chase is alleged to have spent almost $9 million on personal expenses, including making donations to a university and purchasing several Tesla automobiles.
[P]ark View and Slagle made false and misleading statements about Park View's financial condition. As alleged, in the years and months leading up to the bond offering, Park View experienced significant operating losses and repeatedly made unauthorized withdrawals from two reserve accounts to cover routine operating expenses, to pay other debts, and to transfer money to affiliated entities. Park View allegedly provided investors an offering document that included misleading statements about profit and expense projections and showed that Park View would be profitable in the upcoming fiscal year and able to repay the bondholders. According to the complaint, investors purchased $7.6 million in bonds in the April 2016 offering. Although the bonds were nominally offered by the Industrial Development Authority of the County of Pima, Arizona, Park View, as conduit borrower, received the bond proceeds and was responsible for repaying them. Park View allegedly defaulted one year later by reducing the interest payments that it made on the bonds.
[A]bellan masterminded a scheme where he and his co-defendants hid their ownership and sales of microcap issuer Biozoom, Inc. shares by using sham purchase agreements, a network of nominees, anonymizing techniques, and other deceptive practices. Abellan also allegedly employed sophisticated manipulative trading techniques to artificially inflate Biozoom's share price, and executed an extensive promotional campaign to coincide with the trading. The alleged scheme culminated in the defendants' illegal sales of Biozoom, which netted them over $33 million in unlawful proceeds.
[C]laimant provided Enforcement staff with extensive and ongoing assistance during the course of the investigation, including identifying witnesses and helping staff understand complex fact patterns and issues related to the matters under investigation; the Commission used information Claimant provided to devise an investigative plan and to craft its initial document requests; and Claimant made persistent efforts to remedy the issues, while suffering hardships.