Manager and Employee of Long Island Boiler Room Plead Guilty in $147 Million Stock Manipulation Scheme
The Defendants Induced Elderly Investors to Purchase Artificially Inflated Stock in Publicly Traded Companies
Earlier today, in federal court in Central Islip, Ronald Hardy and McArthur Jean pleaded guilty for their roles in connection with a $147 million scheme to defraud investors in publicly traded companies. Hardy, who was a manager at My Street Research and its predecessors (collectively, the “boiler room”), pleaded guilty to conspiracy to commit securities fraud, conspiracy to commit wire fraud, conspiracy to commit money laundering and five counts of securities fraud. Jean, a cold-caller at the boiler room, pleaded guilty to one count of conspiracy to commit securities fraud and agreed to forfeit more than $110,000. When sentenced, Hardy faces a maximum of 20 years’ imprisonment on the top count of conviction and Jean faces a maximum of five years’ imprisonment.
Richard P. Donoghue, 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), announced the guilty pleas. Mr. Donoghue expressed his appreciation to the United States Securities and Exchange Commission for their significant cooperation and assistance in the investigation.
Between January 2014 and July 2017, Hardy and Jean, together with their 14 co-defendants and others, engaged in a scheme to defraud investors and potential investors in publicly traded companies, including National Waste Management Holdings, Inc., trading under the ticker symbol NWMH; CES Synergies, Inc., trading under the ticker symbol CESX; Grilled Cheese Truck, trading under the ticker symbol GRLD; Hydrocarb Energy Corporation, trading under the ticker symbol HECC; and Intelligent Content Enterprises, Inc., trading under the ticker symbol ICEIF (collectively, the “manipulated public companies”). The defendants executed this scheme by (a) artificially generating price movements and trading volume in the shares, (b) causing material misrepresentations and omissions in their communications with victim investors about the advisability of purchasing the shares and (c) fraudulently concealing their control of shares of the manipulated public companies that were held in brokerage accounts in the names of other individuals or entities. In addition, Hardy and other defendants conspired to launder approximately $14,714,493 in proceeds of the stock manipulation scheme.
Hardy and Jean are among 16 defendants charged in this case, and the ninth and tenth defendants, respectively, to plead guilty. The eight defendants who previously pleaded guilty to various charges for their participation in this scheme are Erik Matz, a manager at the Boiler Room, Boiler Room cold-callers Brian Heepke, Dennis Verderosa, Emin L. Cohen, Paul Ewer, Ashley Antos and Sergio Ramirez, and Robert Gilbert, a cold-caller operating from his own company.
The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys Alicyn L. Cooley, Patrick T. Hein and Whitman G.S. Knapp are in charge of the prosecution. Assistant United States Attorney Tanisha R. Payne of the Office’s Asset Forfeiture Section is handling the forfeiture matters.
Residence: Port Jefferson, New York
MCARTHUR JEAN, also known as “John McArthur”
Residence: Dix Hills, New York
Residence: Mt. Sinai, New York
BRIAN HEEPKE, also known as “Brian Targis”
Residence: Farmingdale, New York
Residence: Coram, New York
EMIN L. COHEN, also known as “Ian Grant”
Residence: Coram, New York
Residence: Massapequa, New York
Residence: Central Islip, New York
Residence: East Meadow, New York
Residence: Cold Spring Harbor, New York
E.D.N.Y. Docket No. 17-CR-372