News and Press Releases


Former CEO of Publicly Traded Company Sentenced in Securities Fraud Scheme

FOR IMMEDIATE RELEASE
May 7, 2014

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announce that Richard Altomare, 65, of Palm Beach County, was sentenced yesterday for his participation in a securities fraud “pump and dump” scheme. Altomare was sentenced to 37 months in prison, to be followed by three years of supervised release.

On February 21, 2014, a federal jury in Fort Lauderdale convicted Altomare on four counts, including one count of mail fraud and three counts of securities fraud.

According to the indictment and evidence presented during the trial, Altomare was the former CEO of Universal Express, Inc. Between 2000 and 2003, Altomare and other company insiders sold 500 million unregistered shares of Universal stock to the public, and then issued a series of false press releases in order to offset the resultant negative pressure on the stock price. On March 8, 2007, a Final Judgment in a civil action brought by the Securities and Exchange Commission was entered against Altomare. Among other things, the order prohibited Altomare from “participating in an offering of penny stock, including engaging in activities with a broker, dealer, or issuer for the purposes of issuing, trading or inducing or attempting to induce the purchase or sale of any penny stock.”

Despite the order, Altomare persuaded a start-up financial services firm based in Jacksonville called Sunset Brands, Inc. (SSBN), whose shares traded on the over the counter “penny stock” market, to bring him in as a consultant to attract investors and help write their press releases. Instead, Altomare used his access to the company to carry out a “pump and dump” scheme to defraud investors. In early 2013, Altomare met with a former business associate and conceived a scheme to artificially inflate the share price and trading volume of SSBN stock to enrich himself and his associate. Unbeknownst to Altomare, his former associate had become an informant for the FBI. During recorded conversations and meetings with the informant, Altomare promised to compensate him with SSBN stock to induce his cooperation in the scheme. Altomare’s plan was to have his former associate purchase shares of SSBN stock to mislead investors into believing that SSBN's share price was rising, and that there was a public market for SSBN stock. Altomare also used his access to SSBN’s press releases to further the scheme. Altomare agreed to cause SSBN, which was unaware of his plans, to issue positive press releases about the company to follow and coincide with the illegally induced purchasing by the informant. The purpose of the press releases was to make it appear that SSBN’s stock price was rising because of the positive news, and to conceal the market manipulation scheme from regulatory authorities. Altomare’s plan was to sell, or “dump,” the stock he and the informant controlled after the share price had been artificially inflated, and then split the proceeds with the informant.

Mr. Ferrer commended the investigative efforts of the FBI, and the assistance of the Miami Regional Office of the Securities and Exchange Commission. The case was prosecuted by Assistant U.S. Attorneys Alejandro O. Soto and Kevin J. Larsen.

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A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

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