WASHINGTON, May 23 -- The Securities and Exchange Commission issued the following litigation release:
The Securities and Exchange Commission announced that three corporate officers and a stock promoter were sentenced recently by the United States District Court for the District of Massachusetts in cases filed on December 1, 2011 alleging they used kickbacks and other schemes to trigger investments in various thinly-traded stocks. Those sentenced were: stock promoter Edward Henderson of Lincoln, Rhode Island; and corporate officers Paul Desjourdy of Medfield, Massachusetts (President of Symbollon Pharmaceuticals, Inc.); James Wheeler of Camas, Washington (Chief Executive Officer of MicroHoldings US, Inc.); and Michael Lee of Hingham, Massachusetts (President and Chief Executive Officer of ZipGlobal Holdings, Inc.). The Commission filed related civil charges against these and other parties on December 1, 2011, and those charges remain pending.
Henderson, Desjourdy, Wheeler, and Lee were among 13 defendants who were alleged to have engaged in criminal activity in the midst of an undercover FBI operation. According to the charges filed in U.S. District Court, the schemes involved secret kickbacks to an investment fund representative in exchange for having the investment fund buy stock in certain companies; the kickbacks were to be concealed through the use of sham consulting agreements. What the insiders and promoters did not know was that the purported investment fund representative was actually an undercover agent.
On November 25, 2013, Henderson was sentenced to one year of probation and was ordered to forfeit $12,650 after pleading guilty on January 20, 2012 to one count of wire fraud. On January 16, 2014, Desjourdy was sentenced to 18 months of probation and was ordered to forfeit $54,000 after pleading guilty on January 11, 2012 to one count of mail fraud and one count of conspiracy. On January 16, 2014, Wheeler was sentenced to 18 months of probation and was ordered to forfeit $24,000 after pleading guilty on January 18, 2012 to one count of mail fraud and one count of conspiracy. On March 6, 2014, Lee was sentenced to three years of probation (the first nine months to be served in home confinement with electronic monitoring) and ordered to forfeit $105,603 after pleading guilty on January 11, 2012 to one count of mail fraud and one count of conspiracy.
On December 1, 2011, the Commission filed civil charges of securities fraud against Henderson, Desjourdy, Wheeler, Lee, ZipGlobal Holdings, Inc., and MicroHoldings US, Inc., alleging that they used kickbacks to engage in fraudulent financing transactions involving microcap stocks. Those cases are pending.
For further information, see Litigation Release No. 22177 (Dec. 2, 2011) (Complaints).
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