United States v. Jonathan Randall Curshen, et. al.
Court Docket Number: 1:11-cr-20131-RWG
This case and all further proceedings will be before the Hon. Richard W. Goldberg, a visiting judge who will be sitting in the United States District Court for the Southern District of Florida, Wilkie D. Ferguson, Jr. United States Courthouse, 400 North Miami Avenue, Miami, Florida. (Copy of the transfer order is attached below). Judge Jose Martinez issued an order approving certain alternative notice procedures to be followed by the Government in alerting victims to future court proceedings relating to this case, as required by the Justice For All Act of 2004. The full text of the Court's Order is below.
Defendants Curshen and Montgomery have challenged their convictions and Curshen has challenged the restitution order. An oral argument has been scheduled for May 21, 2014 at 9:00 a.m. in the 12th floor Courtroom, Federal Justice Building, 99 NE 4th Street, Miami, FL 33132.
On March 1, 2013, Judge Goldberg entered a final restitution order as part of the Judgment in this case directing defendants Curshen, Montgomery, Krome, Barham, Weidenbaum and Reynolds to pay, jointly and severally, a total amount of approximately $808,372.32 in restitution. Payments will be made to the victims in the amounts and to the payees identified in the Motion and the list provided by the Office of Probation. However, no disbursements will be made until the defendants’ properties are forfeited and the funds are available for restitution.
No predictions can be made as to when this will happen or when the monies will be distributed. Although the restitution process is often quite time consuming, the government will do everything it can to handle it as quickly as possible.
On May 11, 2012, Jonathan Randall Curshen, the principal of Red Sea Management and Sentry Global Securities, and Nathan Bradley Montgomery, a Las Vegas stock promoter, were each convicted of one count of conspiracy to commit bank, wire and securities fraud following a jury trial for their roles in a $7 million stock manipulation scheme that defrauded investors. Curshen was also convicted of two counts of mail fraud and one count of conspiracy to commit money laundering.
Curshen and Montgomery were subsequently sentenced for their jury convictions on May 11, 2012. Curshen was sentenced to 20 years in prison (concurrent as to counts) and ordered to forfeit $7,375,943.48, jointly and severally with Montgomery, with restitution to be determined at a later date. Montgomery was sentenced to 40 months in prison, with forfeiture and restitution to be determined at a later date. Each was also sentenced to three years supervised release.
The evidence at trial showed that in January and February 2007, Curshen, of Costa Rica and Sarasota, Fla., and Montgomery, of Las Vegas, were involved in a scheme to illegally manipulate the stock price of a company called CO2 Tech (ticker CTTD), which traded on the Pink Sheets, an inter-dealer electronic quotation and trading system.
Evidence at trial showed that Curshen's and Montgomery's co-conspirators controlled the outstanding shares of CO2 Tech, which were used in the stock manipulation scheme. Montgomery and his conspirators engaged in coordinated trades in conjunction with the issuance of false and misleading press releases that were designed to artificially inflate the price of CO2 Tech shares to make it appear that it had significant business prospects. According to these press releases, CO2 Tech purported to have a business relationship with Boeing to reduce polluting gases emitted from airplanes, when in fact CO2 Tech never had any business or relationship with Boeing.
According to the evidence at trial, Montgomery and his co-conspirators, Robert Weidenbaum, Timothy Barham Jr., Ryan Reynolds and others fraudulently "pumped" the market price and demand for CO2 Tech stock through these press releases and coordinated trades of shares of CO2 Tech stock in order to create the appearance of legitimate buying interest by legitimate investors. The evidence showed that as Montgomery and his conspirators pumped the price of the stock, Curshen and his conspirators facilitated the "dumping" of shares through the trading desk at Red Sea and Sentry Global Securities by selling the shares at the direction of their conspirators to the general investing public. The evidence showed that these shares, which became virtually worthless, were purchased by unsuspecting investors, including investors in the Southern District of Florida. The evidence showed that Montgomery, Weidenbaum, Reynolds and Barham were paid approximately $1 million in cash by their conspirators to participate in sham stock trades of CO2 Tech. The cash was delivered to Miami via a private jet from an airport outside New York.
The evidence further showed that, from approximately 2003 through 2008, Curshen operated Red Sea as a money laundering hub in Costa Rica that established bank accounts and brokerage accounts in the United States and Canada under false pretenses and through nominee owners. The evidence further showed that Curshen and his co-conspirators laundered the proceeds of the stock fraud from accounts in the United States to an account in Canada, all in an effort to conceal and disguise the nature and source of the proceeds.
Related Cases: Defendants Robert Lloyd Weidenbaum, Tim Barham, Jr. and Ryan Mark Reynolds, who were also charged in this case previously pleaded guilty to conspiring to commit securities fraud, wire fraud and mail fraud. Weidenbaum and Barham were sentenced on May 10, 2012 to 26 months and 30 months respectively, followed by 3 years of supervised release. In addition, Weidenbaum, Michael Simon Krome and Barham were ordered to forfeit $360,000; $17,490; and $250,000, respectively. Reynolds was sentenced to 39 months in prison, followed by 3 years of supervised release. Michael Simon Krome, a securities attorney from New York, who participated in the conspiracy and evaded federal securities registration requirements in order to provide co-conspirators with millions of unregistered and "free trading" shares of CO2 Tech that were used to execute the stock manipulation, who also pleaded guilty to conspiring to commit securities fraud, mail fraud and wire fraud, was sentenced to 34 months in prison, followed by 3 years of supervised release. Ronny Salazar Morales, Eric Ariav Weinbaum and Izhack Zigdon are currently fugitives.
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