Former Chief Executive Officer of BioCube, Inc. Sentenced to Three Years in Prison for Securities Fraud
Defendant Secretly Conveyed Stock to Co-Conspirator Barred from the Securities Industry to Facilitate Pump-and-Dump Scheme
Earlier today, in federal court in Brooklyn, Boris Rubizhevsky, the former Chief Executive Officer (“CEO”) of BioCube, Inc. (“BioCube”), was sentenced by Judge Roslynn R. Mauskopf to 36 months’ imprisonment for conspiracy to commit securities fraud. Rubizhevsky’s conviction arose out of his participation in a scheme to pump and dump BioCube’s stock, which traded under the ticker symbol BICB. The defendant and his co-conspirators planned to acquire BioCube stock at a low price, artificially inflate its price through manipulative and deceptive means, and then sell it at a higher price—all to the detriment of BioCube’s other stockholders. Rubizhevsky was arrested in April 2017 and pleaded guilty in January 2018.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and James Robnett, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York (IRS-CI), announced the sentence.
“With today’s sentence, Boris Rubizhevsky has been held responsible for abusing his former position as CEO of BioCube to help devise a pump and dump of the company’s stock designed to defraud BioCube’s own stockholders,” stated United States Attorney Donoghue. “This Office is committed to protecting the investing public and the integrity of the financial market from fraudulent schemes.” Mr. Donoghue also expressed his thanks to the United States Securities and Exchange Commission (“SEC”), New York Regional Office, for its assistance in the case.
“Rubizhevsky defaced his former official title as CEO when he aimed to defraud those who invested their money and trust in Biocube, Inc.,” stated FBI Assistant Director-in-Charge Sweeney. “Fraudulent conspiracies and schemes are not a route to success – but a gateway to prison, as manifested by today’s sentence. Still, the work of the FBI and our law enforcement partners does not stop here, as we will be relentless in investigating those who deviously plot against the securities industry.”
“The stock market is a crucial component to our economy and investors must have faith in the CEO’s of those publicly traded companies,” stated IRS-CI Special Agent-in-Charge Robnett. “The special agents of IRS-CI are proud to lend their financial expertise with investigations that protect the integrity of our financial systems.”
According to court documents, Rubizhevsky engaged in a scheme to defraud BioCube’s investors and potential investors by concealing a co-conspirator’s beneficial ownership and control of BioCube shares, so that the co-conspirator could exercise control over the price and trading volume of BioCube’s stock. Rubizhevsky’s co-conspirator had a history of being sanctioned by regulatory authorities and being banned from the securities industry by the SEC. The plans to pump and dump BioCube’s stock after the co-conspirator gained control of the stock were captured in conversations between Rubizhevsky and the co-conspirator on a wiretap recording. The scheme was thwarted by law enforcement before investors could suffer significant losses.
The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys Alicyn L. Cooley, Tyler Smith, and Kaitlin T. Farrell are in charge of the prosecution.
Closter, New Jersey
E.D.N.Y. Docket No. 17-CR-339