A pedestrian wearing a face mask looks at a smartphone as he walks past the New York Stock Exchange (NYSE) in New York on Monday, July 20, 2020.
Michael Nagle | Bloomberg | Getty Images
A Minnesota general contractor pleaded guilty Thursday to a scheme to hijack dormant shell companies and then pump and dump their shares in the OTC market to unwitting investors.
Mark Miller is the second person to admit guilt in the brazen scam, which ran from 2017 to 2019, and involved the fraudulent takeovers of at least four publicly traded companies that had no business effective and had not made the required regulatory filings for a period of time. .
His co-defendant, Christopher James Rajkaran, had previously pleaded guilty to a single count of conspiracy to commit securities fraud last week in U.S. District Court in Minneapolis.
Miller pleaded guilty in this court to the same charge. Like Rajkaran, he will see the other 14 charges he was charged with dismissed when he is convicted later, in accordance with a plea deal with federal prosecutors.
Miller is free on bail. But Rajkaran, who lives in Queens, New York, is being held because of his ties to the Guyanese nation.
A third defendant, Saied Jaberian of Minnesota, has pleaded not guilty and is awaiting trial.
As part of his plea, Miller agreed to forgo $ 38,000 in ill-gotten gains.
Federal sentencing guidelines suggest he faces a jail term of 30 to 37 months and a fine of $ 10,000 to $ 100,000.
But Judge David Doty will determine Miller’s actual sentence upon conviction.
During his plea hearing, Miller gave brief responses acknowledging his understanding of the plea agreement and a description of his criminal acts as detailed by a prosecutor.
“I am guilty of the summary you went through,” Miller told the prosecutor.
The three defendants were charged in June with a scheme of using letters of resignation allegedly from other people to take control of four shell companies – Digitiliti, Encompass Holdings, Bell Buckle Holdings and Utilicraft Aerospace Industries.
Miller and Jaberian, along with an unidentified person linked to Miller, became the nominal CEOs and chairmen of the targeted companies, prosecutors said.
Miller admitted to using the Securities and Exchange Commission’s public ranking system EDGAR and fake press releases to inflate the stock prices of these companies by claiming new business opportunities, when in fact the companies did not have significant transactions or revenues.
Miller admitted that he and his co-defendants bought millions of shares of the companies, in many cases for well under a dime a share, and then sold them on the over-the-counter market for several times what they had paid. them. Prosecutors said the trio made hundreds of thousands of dollars in profits from the scheme.
At the time he was charged, Miller was involved in an attempt to take control of a Florida stock company, New World Gold Corp., which is not named as one of its seven targets in the criminal case or in a Miller civil lawsuit filed by the SEC.
Miller voluntarily dropped a lawsuit he filed in Florida as part of his efforts to take over New World Gold less than two weeks after CNBC reported his involvement with that company.
After being criminally charged this summer, Miller resigned as a member of the Breezy Point, Minn city council.