Securities Industry Commentator by Bill Singer Esq

December 4, 2017

Russian Cyber-Criminal Sentenced to 14 Years in Prison for Role in Organized Cybercrime Ring Responsible for $50 Million in Online Identity Theft and $9 Million Bank Fraud Conspiracy  (DOJ Press Release) 

Roman Valeryevich Seleznev aka Track2, Bulba and Ncux, 33, was to 168 months in prison for one count of participation in a racketeering enterprise pursuant to an indictment returned in the District of Nevada, and to 168 months in prison for one count of conspiracy to commit bank fraud, said sentences to run concurrently. Seleznev was also ordered to serve three years of supervised release and to make  $50,893,166.35 and $2,178,349 in restitution. Seleznev is also a defendant in another federal wire fraud and computer hacking case.  On Aug. 25, 2016, a federal jury convicted Seleznev of 38 counts related to his role in a scheme to hack into point-of-sale computers to steal and sell credit card numbers to the criminal underworld.  On April 21, Seleznev was sentenced to 27 years in prison for those crimes. 

Two Men Plead Guilty To Defrauding Investors Of Over $7 Million In Fuel Cell Company Investor Fraud Scheme (DOJ Press Release) 

George Doumanis and Emanuel Pantelakis, a/k/a "Manny," each pled guilty to conspiracy to commit securities fraud, which carries a maximum sentence of five years in prison and a maximum fine of $250,000 or twice the gross gain or loss from the offense. As set forth in part in the DOJ Press Release: 

From at least February 2008 until at least 2014, DOUMANIS and PANTELAKIS, along with their co-conspirator Danny Pratte, engaged in a scheme to defraud investors in the publicly traded company Terminus Energy, Inc. ("Terminus"), by inducing victims to invest in Terminus stock through material misrepresentations and omissions and by misappropriating investor funds for their own purposes. 

Terminus was purportedly producing and marketing a commercially viable "fuel cell" as an alternative energy source.  DOUMANIS, PANTELAKIS, and Pratte sold shares of Terminus to investors through private offerings.  In connection with such sales, DOUMANIS, PANTELAKIS, and Pratte provided investors with private placement memorandums ("PPMs") that contained materially false and misleading statements.  For example, the PPMs falsely stated that (i) Terminus had completed its goal of developing a working fuel cell in mid-2008; (ii) Terminus would use specified investors' funds to make payment on third-party development contracts designed to manufacture a working fuel cell; and (iii) Terminus would pay no more than 10 percent in sales commissions.  In truth, and as DOUMANIS, PANTELAKIS, and Pratte well knew, (i) there was no working fuel cell; (ii) the third party contracts had been cancelled after Terminus failed to make payment to the third parties; and (iii) unregistered salesmen were receiving commissions far in excess of 10 percent.  The PPMs also failed to accurately disclose the involvement of either DOUMANIS, who was barred from involvement in penny stocks as a result of a 2003 conviction for conspiracy to commit securities fraud, wire fraud, and mail fraud, or PANTELAKIS, who had been permanently barred by the Financial Industry Regulatory Authority ("FINRA") following allegations that he had made fraudulent misrepresentations to customers in connection with the sale of securities.  DOUMANIS, PANTELAKIS, and Pratte also caused similar misrepresentations to be made in business plans, executive summaries, and presentations shared with potential investors, as well as in publicly available press releases.  Through these false and misleading statements, DOUMANIS, PANTELAKIS, and Pratte fraudulently induced investors to purchase nearly $8 million of Terminus stock. 

Rather than use the investor money as promised, DOUMANIS, PANTELAKIS, and Pratte misappropriated the funds for their own use and for use by their co-conspirators.  For example, DOUMANIS, entities affiliated with DOUMANIS, and certain of his family members received at least $570,000, including payments to personal credit cards and toward DOUMANIS's residential mortgage.  PANTELAKIS and certain of his family members received at least $420,000, including payments to personal credit cards and to pay for PANTELAKIS's wife's Mercedes-Benz.  Pratte personally received approximately $1 million.  In addition, the unregistered salespeople collectively received undisclosed commissions of more than $1.5 million.

Bleak Marshall Family Drama Hits FINRA Arbitration

Today's Blog comes upon yet another bleak bit of ongoing probate litigation, now in the form of a FINRA arbitration, swirling around the heirs of J. Howard Marshall II, who, you may recall, was a so-called oil tycoon who died in 1995 at age 90 after having married, you may recall, a 26-year-old  stripper named Vickie Lynn Hogan, who, you may recall, was also known as Anna Nicole Smith, who, you may recall, was a Playboy playmate, who, you may recall, died of a drug overdose in 2007 and, who, you may recall, was not named as a beneficiary in her husband's will, which her estate is contesting on behalf of her daughter notwithstanding that the United States Supreme Court has already rejected the claims.  Also, you may recall that J. Howard Marshall II's son E. Pierce Marshall died in 2005 and that Pierce's widow Elaine Marshall is often listed among the wealthiest women in the United States. Preston Marshall, you may recall, was Pierce and Elaine's son, and, you may recall, he filed a temporary restraining order against his mom. You may also recalled that a Louisiana state probate court judge got so fed up with the ongoing lawsuits that he famously said "I'm honestly -- I'm trying to get recused. Because I can't -- it is not fair to me, my staff, my life to have to deal with you people who do not want to resolve this cases. READ