DEPARTMENT OF JUSTICE

ACTING UNITED STATES ATTORNEY EDWARD R. RYAN
WESTERN DISTRICT OF NORTH CAROLINA

FOR IMMEDIATE RELEASE
MONDAY, MAY 19, 2009

CONTACT: SUELLEN PIERCE
704.338.3120
FAX 704.227.0264

DAVID A. HAGEN CONVICTED OF SECURITIES FRAUD AND INTERNATIONAL MONEY LAUNDERING SCHEME Local Businessman and His Co-Conspirators Made Approximately $28 Million Selling Stock to the Public CHARLOTTE, N.C. -- Acting United States Attorney Edwdard R. Ryan, Owen Harris, Special Agent in Charge of FBI Operations in North Carolina, and Jeannine Hammett, Special Agent in Charge of the Internal Revenue Service-Criminal Investigation, announced that DAVID A. HAGEN was convicted by a jury on Friday, May 15, 2009, after a two-week trial on three counts of conspiracy to commit securities fraud, conspiracy to commit mail/wire fraud, and conspiracy to commit money laundering.

HAGEN, a United States citizen who fled to the Bahamas during the investigation of this matter, was originally arrested on a criminal complaint charging him with joining a multi-million dollar international securities fraud and money laundering conspiracy. HAGEN was arrested at J.F.K. International Airport in Queens, New York in September 2007, as he attempted to enter the United States on a commercial airline flight from Nassau, Bahamas after living in the Bahamas for approximately 18 months. HAGEN was denied bond and has been held in custody since that time.

The evidence at trial showed that HAGEN was the owner of a company in Southern Pines, North Carolina known as Gatelinx Corp. (hereafter, “Gatelinx”). Gatelinx was later merged with a publicly-traded shell company known as Autoleasecheck.com, Inc., which company was quoted on the Pinksheets and traded in the Over-the-Counter market. The merged company was renamed GTX Global Corp. (hereafter, “GTX Global”). Following this merger, HAGEN and his co-conspirators controlled approximately 90% of the company’s stock, but held the stock in the names of offshore companies. The evidence at trial showed that, from October 2005 through in or about June 2006, HAGEN and his co-conspirators engaged in a fraudulent promotional campaign designed to drive up the stock price and trading volume of GTX Global. Specifically, the evidence showed that the co-conspirators created websites fraudulently touting the company’s supposed VoIP technology and misstating the company’s financial condition. In addition, the evidence showed that the company issued press releases designed to mislead the public into believing that HAGEN – who was a two-time federal felon – was not involved in the management of the company. Finally, the evidence showed that HAGEN caused the company to issue Disclosure Statements to the public, which statements falsely stated that no one controlled more than 5% of the company’s stock.

The evidence at trial further showed that, from in or about October 2005 through in or about June 2006, HAGEN and his co-conspirators used Canadian brokerage firms to sell approximately 6 million shares of GTX Global stock held in the names of offshore companies for proceeds of approximately $32 million. HAGEN and his co-conspirators then wired these funds from the Canadian brokerage firms to bank accounts in the Bahamas, Curacao, Panama, Cyprus, Dubai, Switzerland, and Gibraltar.

HAGEN faces a maximum sentence of 45 years imprisonment. HAGEN was also ordered by the jury to forfeit $27.6 million in proceeds from his crimes. Of course, any sentence imposed will be determined by the Court upon consideration of the Federal Sentencing Guidelines, which the Court consults in order to determine each defendant’s actual sentence based upon a formula that takes into account the severity and characteristics of the offense and each defendant’s criminal history, if any.

Acting U.S. Attorney Ryan credits the FBI and IRS-CI with leading the investigation that resulted in the filing of these charges. Acting U.S. Attorney Ryan also credits the U.S. Securities & Exchange Commission for its investigation, which led ultimately to the filing of certain of these charges. The Government is represented in this matter by Assistant U.S. Attorneys Matthew T. Martens and Adam Morris of the U.S. Attorney’s Office Criminal Division in Charlotte. HAGEN is represented by Steven T. Meier, Esq. of of Charlotte, North Carolina.

David A. Hagen
54 years of age