Boston Man Sentenced for Securities Fraud
BOSTON – A Boston man has been sentenced in federal court for exerting secret control over a Massachusetts-based company, Cannabiz Mobile, Inc., as part of a pump-and-dump securities fraud scheme.
Christopher R. Esposito, 57, formerly of Everett, was sentenced on Nov. 14, 2023 by U.S. District Court Judge Patti B. Saris to five years of probation, with three months to be served at a halfway house. He was also ordered to pay forfeiture and restitution. Esposito pleaded guilty to one count of securities fraud in April 2023.
Between 2012 and 2015, Esposito and co-conspirator, Anthony Jay Pignatello, worked together to conceal their control over Cannabiz Mobile, Inc. and to use backdated promissory notes to fraudulently obtain free-trading shares in the company. Among other steps taken to conceal their control, Esposito caused another individual to be installed as the company’s chairman, president and CEO. In reality, the executive reported to Esposito. Esposito and Pignatello then arranged for a promotional campaign in October 2014 to artificially inflate the value and trading volume of Cannabiz Mobile, Inc’s stock so that they could secretly sell their shares. In total, between September 2014 and February 2015, Esposito personally sold over 1.3 million shares fraudulently obtained as part of the scheme.
Esposito was ordered to pay $20,294 in forfeiture in connection with the pump-and-dump of Cannabiz Mobile. He was also ordered to pay $61,693.50 in restitution to investors who lost money in a separate purported business venture that Esposito pitched involving the company Code2Action, Inc. Between August 2019 and February 2020, Esposito represented to investors that he would take Code2Action, Inc. public via a reverse merger and he solicited investments in the company for that purpose. The reverse merger, however, never took place.
Pignatello separately pleaded guilty in March 2021 to one count of conspiracy to commit securities fraud for his role in the Cannabiz Mobile scheme. He is scheduled to be sentenced on Dec. 12, 2023 before U.S. District Court Judge George A. O’Toole Jr.
Acting United States Attorney Joshua S. Levy and Jodi Cohen, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division made the announcement. Assistant U.S. Attorney James R. Drabick of the Securities, Financial & Cyber Fraud Unit prosecuted the case.