Stock Promoter Sentenced to 44 Months’ Imprisonment for $131 Million Market Manipulation Scheme
Defendant Profited By Selling To Investors Worthless Stock of ForceField Energy Inc., a Company That Purported To Be a Distributor and Provider of LED Lighting Products
Earlier today, in federal court in Brooklyn, Louis Petrossi, a former registered broker, was sentenced by United States District Court Judge Brian M. Cogan to 44 months’ imprisonment, to be followed by three years’ supervised release, for his role in the fraudulent market manipulation of ForceField Energy Inc. (ForceField), a publicly-traded company previously listed on the NASDAQ under the ticker symbol “FNRG.” The Court also ordered Petrossi to pay $8 million in restitution and $335,748.78 in forfeiture. On May 2, 2017, following a two-week trial, a federal jury convicted Petrossi of conspiracy to commit securities fraud, conspiracy to commit wire fraud, money laundering conspiracy and securities fraud.
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 sentence.
Between 2009 and 2015, Petrossi and others engaged in a scheme to defraud investors in ForceField, a purported worldwide distributor and provider of LED lighting products and solutions, by artificially controlling the price and volume of traded shares of ForceField through, among other means: (1) using nominees to purchase and sell ForceField stock without disclosing this information to investors and potential investors, (2) orchestrating the trading of ForceField stock to create the misleading appearance of genuine trading volume and interest in the stock, and (3) concealing secret payments to stock promoters and broker dealers who promoted and sold ForceField stock to investors and potential investors while falsely claiming to be independent of the company. The fraudulent scheme caused a loss of approximately $131 million to the investing public.
Specifically, between December 2009 and April 2015, Petrossi received secret cash payments from a ForceField executive in exchange for promoting the sale of ForceField stock to investors while representing himself to investors as the CEO of an investment research firm, “Wealth Research Institute.” He did not disclose these payments. Petrossi also engaged in manipulative trading of ForceField stock at the direction of the same ForceField executive.
On March 9, 2018, Petrossi was convicted in the United States District Court for the Middle District of Pennsylvania of committing a separate fraud scheme, in which he participated from January 2015 through January 2017. This scheme, which involved the misappropriation of over $1 million in investor funds, continued after Petrossi was arrested and placed on pretrial release in the ForceField case.
Today’s proceeding is the eighth sentencing to take place in connection with the fraud in ForceField securities. One remaining defendant awaits sentencing.
The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys Mark E. Bini and Lauren H. Elbert are in charge of the prosecution.
Residence: Reno, Nevada
E.D.N.Y. Docket No. 16-CR-234 (BMC)