A former New Hampshire stock broker and his Florida-based partner were recently arrested on charges arising out of their alleged participation in a market manipulation scheme.
Robert Raffa of Penacook, New Hampshire and David Aubel of Marco Island, Florida were charged in a criminal complaint with conspiracy and wire fraud based on their alleged involvement to manipulate the stock for Green Energy Renewable Solutions Inc., a penny stock company that claimed to develop and operate waste processing and recycling facilities in Detroit. The men were arrested at their respective homes in New Hampshire and Florida.
According to the complaint, in early 2012, Raffa and Aubel used four foreign entities to acquire almost all of Green Energy’s unrestricted stock without reporting the interest. The men allegedly hired a promoter to sell to potential investors while they sold their shares that the investors planned to buy.
The criminal complaint alleges that the men sold more than 1.5 million shares for $950,000 while they searched for a second promoter to sell more stocks, leading them to an undercover FBI agent. The men traded 174,000 shares to an account that was, unknowingly to the men, controlled by the FBI. They wired $6,000 into the account that they believed to be controlled by a corrupt broker.
The Securities and Exchange Commission (SEC) also announced securities fraud charges against the men in connection with the scheme. The charges come from a multiyear investigation focused on preventing fraud in the microcap stock markets.
The charges follow a series of cases filed by the U.S. attorney for the District of Massachusetts and the SEC in which more than 30 individuals have been criminally charged and convicted for using kickbacks and other schemes to trigger investment in, or manipulate the stock of, thinly-traded stocks.
The charge of conspiracy has a sentence of up to five years in prison, three years of supervised release and a fine of $250,000, or twice the gross loss. The wire fraud charge has a sentence of up to 20 years in prison, three years of supervised release and a fine of $250,000, or twice the gross gain or loss.
