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Press Release

CodeSmart Holdings, Inc. CEO and Attorney Plead Guilty to Participating in a $86 Million Market Manipulation Scheme

For Immediate Release
U.S. Attorney's Office, Eastern District of New York
Defendants Helped Manipulate the Stock Price of CodeSmart Holdings, Inc.

Earlier today, Ira Shapiro, the former Chief Executive Officer of CodeSmart Holdings, Inc. (“CodeSmart”), a publicly-traded company, and Darren Ofsink, a Manhattan attorney and founder of Ofsink LLC, pleaded guilty to one count of conspiracy to commit securities fraud for their participation in a $86 million market manipulation scheme involving CodeSmart, which traded under the ticker symbol ITEN.  The plea was entered before United States District Judge Eric N. Vitaliano at the federal courthouse in Brooklyn.

The guilty pleas were announced by Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI).

According to court filings, in early May 2013, the defendants, along with their charged co-conspirators, engineered a reverse merger of CodeSmart, a private company, with a public shell company.  After gaining control of CodeSmart’s three million purportedly unrestricted shares, the co-conspirators on two occasions fraudulently inflated CodeSmart’s share price and trading volume and then sold their shares at a profit when the price reached desirable levels ­­— a scheme commonly referred to as a “pump and dump.”  The first pump and dump occurred between approximately May 13, 2013 and August 21, 2013.  During this period, the co-conspirators manipulated CodeSmart’s stock price by raising it from $1.77 to a high of $6.94, before causing it to drop to $2.19.  The second pump and dump occurred between approximately August 21, 2013 and September 20, 2013.  During this period, the defendants and their co-conspirators manipulated CodeSmart’s stock price by raising it from $2.19 to a high of $4.60, before causing it drop to $2.13.

CodeSmart’s market capitalization at its highest closing price of $6.94 per share on July 12, 2013 was $86,347,800.  However, that same day, CodeSmart filed with the U.S. Securities and Exchange Commission an amended Form 10-K, in which it listed only $6,000 in total assets, $7,600 in revenue, and a net loss of $103,141.  By December 30, 2013, CodeSmart’s stock was trading at $0.66 per share, and on July 9, 2014, its stock closed at $0.01 per share.

When sentenced, Shapiro and Ofsink each face up to five years in prison, a fine and the forfeiture of criminal proceeds.  They will also be required to make full restitution to their victims.   

The government’s case is being handled by the Office’s Business and Securities Fraud Section.  Assistant United States Attorneys Shannon C. Jones, Patrick T. Hein, and Mark Bini are in charge of the prosecution with assistance provided by Assistant United States Attorney Claire Kedeshian of the Office’s Civil Division, which is responsible for the forfeiture of assets.

The Defendants:

Age:  56
Residence: Congers, New York

Age:  48
Residence: Merrick, New York

E.D.N.Y. Docket No. 14-CR-399 (S-1) (ENV)


John Marzulli
Tyler Daniels
United States Attorney’s Office
(718) 254-6323

Updated October 19, 2017

Financial Fraud