New guilty plea in $250 mln penny stock 'pump-and-dump' scheme

lunes 23 de mayo de 2016 17:42 GYT

By Jonathan Stempel

NEW YORK May 23 (Reuters) - A 71-year-old man who helped run a complicated offshore scheme to manipulate prices of more than 40 U.S. stocks and launder more than $250 million of profit pleaded guilty on Monday to a money laundering conspiracy charge, federal prosecutors said.

Robert Bandfield admitted to involvement in what prosecutors called a large "pump-and-dump" scheme that in 2014 briefly caused the market value of Cynk Technology Corp, a development stage company with no revenue or assets, to rocket past $6 billion.

Gregg Mulholland, a U.S.-Canadian penny stock promoter who prosecutors said also helped run the scheme, pleaded guilty on May 9 to a money laundering conspiracy charge.

Bandfield, a U.S. citizen who had been living in Belize City, Belize, entered his plea before U.S. District Judge I. Leo Glasser in Brooklyn, New York.

The defendant faces up to 20 years in prison at his Sept. 1 sentencing. He will also forfeit $1 million and give up stakes in three Belize companies sharing the IPC name.

Bandfield has been in federal custody since his September 2014 arrest, and had been scheduled to go to trial on May 31.

"This is a sad day for Mr. Bandfield and those who care about him," his lawyer Eugene Ingoglia said in an interview. "We look forward to making our arguments for a fair sentence."

Prosecutors said Bandfield helped set up a network of shell companies in Belize and the West Indies to let Mulholland, who was known as "Stamps" and "Charlie Wolf," and other accomplices manipulate the prices of penny stocks.   Continuación...