Florida Resident Pleads Guilty to Conspiracy and Tax Offenses Stemming from Stock "Pump and Dump" Scheme
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that DAMIAN DELGADO, also known as “Michael Neumann,” 44, of Orlando, Florida, waived his right to be indicted and pleaded guilty today before U.S. District Judge Jeffrey A. Meyer in New Haven to conspiracy and tax offenses stemming from his role in a securities fraud scheme.
According to court documents and statements made in court, between approximately 2009 and July 2016, DELGADO conspired with others, including Christian Meissenn and William Lieberman, to defraud investors through a stock “pump and dump” scheme. DELGADO and his co-conspirators induced investors to purchase securities by making false and misleading representations in calls, emails and press releases concerning the securities and the issuing companies, thereby causing the price of those securities to become falsely inflated. The issuing companies, which were essentially shell companies with virtually no legitimate business activities, were controlled by Lieberman and others. They included Terra Energy Resources Ltd. (stock symbol “TRRE”); Mammoth Energy Group, Inc. (stock symbol “MMTE”), a company that later became Strategic Asset Leasing Inc. (stock symbol “LEAS”); Trilliant Exploration Corporation (stock symbol “TTXP”); Hermes Jets, Inc. (stock symbol “HRMJ”), which later became Continental Beverage Brands Corporation (stock symbol “CBBB”); Dolat Ventures, Inc. (stock symbol “DOLV”), and Fox Petroleum, Inc. (stock symbol “FXPT”).
DELGADO used pseudonyms in his communications with investors in order to conceal his prior felony convictions and his permanent bar by the Securities and Exchange Commission from participating in any offering of penny stocks. His numerous misrepresentations induced investors to purchase securities, thus causing the share price of the securities to become artificially inflated. Certain of DELGADO’s co-conspirators then sold their own preexisting positions in the securities at a profit. They then allowed he price of the securities to fall, leaving investors with worthless and unsalable stock. As a result, victim investors lost millions of dollars.
DELGADO received approximately 25 percent of all money that he induced individuals to invest. His personal gain from the scheme totaled $346,652.18. DELGADO disguised the income by having the funds flow through the trust accounts of various attorneys, including Corey Brinson in Connecticut, to bank accounts in the name of DELGADO’s wife, his stepdaughter and various shell entities he and his wife controlled. DELGADO’s failure to pay taxes on this income resulted in a loss of $54,080 to Internal Revenue Service.
DELGADO pleaded guilty to one count of conspiracy to commit mail and wire fraud, which carries a maximum term of imprisonment of 20 years, and one count of tax evasion, which carries a maximum term of imprisonment of five years. He is scheduled to be sentenced on August 30, 2017.
At sentencing, DELGADO will be ordered to pay restitution to his victims, as well as back taxes, interest and penalties to the Internal Revenue Service.
On November 8, 2016, Meissenn, also known as “Christian Nigohossian,” of Suffield, Conn., pleaded guilty to one count of conspiracy to commit mail and wire fraud and one count of tax evasion. He awaits sentencing.
On May 10, 2017, Lieberman, of Boca Raton, Fla., pleaded guilty to one count of conspiracy to commit mail and wire fraud and one count of tax evasion. He awaits sentencing.
On January 20, 2017, Brinson, of Hartford, pleaded guilty to one count of engaging in a monetary transaction in property derived from specified unlawful activity. On April 13, 2017, he was sentenced to 36 months of imprisonment.
This ongoing investigation is being conducted by the Federal Bureau of Investigation, Internal Revenue Service – Criminal Investigation Division and U.S. Postal Inspection Service, with assistance from the Connecticut Department of Banking and the Hartford and Stamford Police Departments. This case is being prosecuted by Assistant U.S. Attorneys Avi M. Perry and Peter S. Jongbloed.
Citizens with information that may be helpful to this ongoing investigation, or who believe they may have been victimized by this scheme, are encouraged to contact the FBI at (203) 777-6311.