Corporate Insider Sentenced to 10 Years' Imprisonment for Conspiring with Long Island Boiler Room to Pump and Dump Stock on Unsuspecting Elderly Investors
Illegal Stock Promotion and Manipulation Scheme Cost Victims Millions of Dollars
Earlier today, in federal court in Central Islip, Jeffrey Chartier, a former registered broker who participated in a criminal conspiracy to promote and manipulate the price of shares in publicly traded companies, was sentenced by United States District Judge Joanna Seybert to 10 years’ imprisonment for conspiracy to commit securities fraud, securities fraud, conspiracy to commit wire fraud, money laundering conspiracy, and money laundering. The Court also ordered Chartier to pay $1,022,398.89 in forfeiture and $6,083,603.45 in restitution. Chartier and co-defendant Lawrence Isen were convicted of the charges by a federal jury in March 2020 following a six-week trial. Isen is awaiting sentencing.
Breon Peace, United States Attorney for the Eastern District of New York, and Michael J. Driscoll, Assistant Director-in-Charge, Federal Bureau of Investigation (FBI), New York Field Office, announced the sentence.
“Jeffrey Chartier and his confederates lined their pockets with the lifetime savings of hard-working citizens they victimized all around the country,” stated United States Attorney Peace. “Today’s sentences should serve as a reminder to so-called white-collar criminals that this Office will hold them accountable for their selfish actions and the devastation they inflict upon the lives and families of others.”
Mr. Peace also thanked the Federal Bureau of Investigation, New York Field Office, for its hard work and dedication in leading the investigation, and expressed his appreciation to the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority, Inc., Criminal Prosecution Assistance Group (FINRA CPAG), for their cooperation and assistance.
From 2014 to 2016, Isen, Chartier and others working with a Melville, New York-based boiler room artificially inflated the price and trading volume of stock in struggling companies with poor prospects, and off-loaded it onto unsuspecting victims who were often elderly and vulnerable.
The evidence at trial proved that from approximately 2014 to 2016, Chartier paid the boiler room to illegally prop up the stock price of National Waste Management Holdings, Inc., trading under the ticker symbol NWMH, and CES Synergies, Inc., trading under ticker symbol CESX, through manipulative trading, and also to dump his own NWMH and CESX shares on innocent investors through illegal matched trades. NWMH and CESX were previously profitable private companies that were each run by individuals seeking to retire. Chartier persuaded them to pay him in large blocks of stock to take their companies public on promises that doing so would sustain the companies for the future. Instead, Chartier hired the boiler room, which fraudulently inflated these companies’ share prices using high-pressure sales tactics, and then dumped his own shares through matched trades, which caused the companies’ stock prices to plummet. As part of the sentencing, the Court ordered the repatriation of Chartier’s remaining shares in NWMH and CESX.
The evidence at trial showed that Isen colluded with crooked investors, both in the United States and overseas, to dump large volumes of shares in Hydrocarb Energy Corp., trading under the ticker symbol HECC, and Intelligent Content Enterprises, Inc. trading under the ticker symbol ICEIF, on the victims. He did so by, among other things, connecting the investors with the boiler room; negotiating the terms of the arrangements between them; and managing the relationships between them. Isen assisted the boiler room in its illegal cold call campaigns that used lies and high-pressure sales tactics to lure victims, by, among other things, transferring money and stock required by the boiler room for the campaigns; working with the boiler room to fill the duped victims’ orders with Isen’s crooked investors’ stock; and creating fraudulent stock purchase agreements, consulting agreements and invoices to cover up the illegal conduct.
The government has calculated that the conspiracy’s market manipulation fraudulently inflated the stock price of HECC, ICIEF, NWMH and CESX and one other company by more than $147 million. All 16 defendants charged in this case have been convicted.
Assistant United States Attorneys Whitman G.S. Knapp and Kaitlin T. Farrell are in charge of the prosecution. Assistant United States Attorney Tanisha Payne of the Office’s Asset Recovery Section is handling forfeiture matters in the case.
Sunny Isles, Florida
San Diego, California
Docket No. 17-CR-372 (JS)