Las Vegas Men Plead Guilty to Defrauding Investors In Penny Stock Fraud Scheme
Las Vegas, Nev. - Daniel G. Bogden, United States Attorney for the District of Nevada, announces that THOMAS BECKER, age 52, a resident of Las Vegas, Nevada, pleaded guilty today before U.S. District Court Judge Phillip Pro to Securities Fraud and Aiding and Abetting for his role in a "pump and dump" penny stock fraud scheme in which he and another individual, HOMER LANGRILL, released false and misleading information about a publicly-traded company in order to sell the stock at artificially increased prices. LANGRILL, age 50, also a Las Vegas resident, pleaded guilty to the same charges on Tuesday of this week.
According to the court records, from approximately January 3, 2002, through late June 2002, THOMAS BECKER was the Chief Executive Officer and member of the Board of Directors of Greater Northwest Research & Development (GNRD), a publicly-traded "microcap" company that was licensed in Florida and conducted business in Nevada. The State of Florida dissolved the corporation in August 1996 because it failed to file mandatory reports. BECKER worked with and at the direction of HOMER T. LANGRILL, who was actually controlling the company but whose name was not disclosed in corporate documents. LANGRILL had two prior federal wire fraud convictions in Virginia, for which he was sentenced to three years and 16 months in prison, respectively, and had a prior federal conviction for passing fictitious checks in Oregon, for which he was sentenced to 30 months in prison. After LANGRILL served his prison sentences on these convictions, he was placed on federal supervised release, and on March 20, 2002, his release status was revoked for his unauthorized affiliation with GNRD, and he was returned to federal prison.
HOMER LANGRILL devised a scheme in which he and THOMAS BECKER would pump false information about GNRD into the market, including false information about its legal status, the identity of its directors, its eligibility for quotation on the Over-The-Counter (OTC) Bulletin Board, and its future financial performance, in order to sell the stock at artificially high prices. BECKER and LANGRILL also failed to disclose that GNRD was controlled by LANGRILL and that LANGRILL was a convicted felon. The false information was disseminated between January 30 and the end of February 2002, causing investors to purchase the stock, thus increasing its price. BECKER and LANGRILL then sold their shares of the stock at the artificially increased price before the true information became known to the investing public.
To carry out the scheme, BECKER and LANGRILL promoted GNRD's stock by issuing press releases and broadcasting infomercials on cable television, and by releasing information on an Internet website, www.gnrd.com. All of the information in these press releases, infomercials, and website was false and misleading, in that it implied that GNRD was a legally valid corporation in good standing and failed to disclose that GNRD was administratively dissolved in August 1996. In the three days prior to the defendants' dissemination of the first of six press releases, GNRD stock traded at between $0.23 to $0.25 per share on reported volume of between 1,000 and 10,000 shares. The day after the first press release was issued, the value of GNRD stock increased by approximately 40 percent to $0.35 per share, and volume increased by approximately 200 percent to 30,000 shares. In the period in which BECKER and LANGRILL disseminated the false and misleading information about GNRD, BECKER and LANGRILL acquired at least 6,500,000 and 6,850,000 shares, respectively, of the GNRD stock. BECKER sold more than two million shares of GNRD stock within 40 days after receiving them, generating at least $46,400 in profits for himself, and LANGRILL sold at least 92,500 shares of GNRD stock within 31 days of receiving them, generating at least $24,537 in profits. By October 31, 2002, the GNRD stock was trading at only $0.0001 per share.
THOMAS BECKER is released on bond pending sentencing; HOMER LANGRILL is in federal custody. Both are facing up to 10 years in federal prison, a $1,000,000 fine, and may be ordered to make restitution to victims of the crime. The actual sentence will be dictated by the United States Sentencing Guidelines, which take into account a number of factors, and will be imposed in the discretion of the Court. MR. BECKER is scheduled to be sentenced before U.S. District Court Judge Philip Pro on January 9, 2003, at 9:30 a.m., and MR. LANGRILL is scheduled to be sentenced before U.S. District Court Judge Howard D. McKibben on January 15, 2003, at 9:00 a.m.
The prosecution is the result of an investigation by the Federal Bureau of Investigation and the Securities and Exchange Commission (SEC), as part of the District of Nevada Corporate and Securities Fraud Task Force, comprised of federal, state and local law enforcement agencies, including the Federal Bureau of Investigation, Internal Revenue Service Criminal Investigation, the Securities and Exchange Commission, the Postal Inspection Service, Nevada Secretary of State Securities Division, and the Las Vegas Metropolitan Police Department, Fraud Division. The mission of the Task Force is to identify and target for prosecution individuals and entities engaged in securities, commodities, and other corporate fraud within the state of Nevada. The case is being prosecuted by Assistant United States Attorney Justin J. Roberts.
Federal securities laws require many public companies to register with the SEC and file annual reports containing audited financial statements. Anyone can access and download these reports from the SEC's EDGAR database http://www.sec.gov/edgar.shtml for free. Before you invest in a company, check to see whether it is registered with the SEC and read its reports. Some companies do not have to register their securities or file reports on EDGAR. If you can't find a company on EDGAR, call the SEC at (202) 942-8090 to find out if the company filed an offering circular under Regulation A or a Form D, and be sure to request a copy. Information on how to avoid investment scams is also available at the SEC website at: http://www.sec.gov/investor/pubs/cyberfraud.htm. Never, ever, make an investment based solely on what you hear on a television infomercial or read in an online newsletter or bulletin board posting, especially if the investment involves a small, thinly-traded company that is not well known.
You should also always check with your state's securities regulator, which you can find on the website of the North American Securities Administrators Association
(http://www.nasaa.org/nasaa/abtnasaa/find_regulator.html), to see if they have more information about the company and the people behind it. They can check the Central Registration Depository (CRD) and tell you whether the broker touting the stock or the broker's firm has a disciplinary history. They can also tell you whether they have cleared the offering for sale in your state.
The National Association of Securities Dealers, Inc. can also give you a partial disciplinary history on the broker or firm that is touting the stock. Call their toll-free public disclosure hot-line at (800) 289-9999 or visit their website at http://www.nasdr.com.