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Justice News

Department of Justice
U.S. Attorney’s Office
District of Massachusetts

Tuesday, August 2, 2016

California Attorney and Two Brothers Charged in Stock Manipulation Scheme

BOSTON – A California-licensed attorney and his two brothers were charged in U.S. District Court in Boston in connection with a scheme to manipulate the market for the stock of a publicly traded microcap company. 

Jehu Hand, 59, was charged in a superseding indictment with conspiracy to commit securities fraud and wire fraud, securities fraud, and wire fraud.  His brother Learned Hand, 57, was charged today in an Information with conspiracy to commit securities fraud.  His other brother, Adam Hand, 51, previously pleaded guilty to an Information charging him with conspiracy to commit securities fraud.  All of the charges arise out of the Hand brothers’ involvement in a pump-and-dump scheme to manipulate the market for the stock of Crown Marketing, a microcap or “penny stock” company that claimed to own patented drug delivery technology.  In December 2015, Jehu Hand was charged with destruction of records in a federal investigation as well as charges related to his participation in a scheme to pump and dump the publicly traded securities of another penny stock company, Greenway Technology. 

According to the superseding indictment, Jehu Hand and his co-conspirators engaged in a scheme to conceal their control over the majority of Crown’s free-trading stock so that they could “pump” up the company’s share price and then secretly “dump” their shares into the market.  Jehu Hand filed false registration statements with the Securities and Exchange Commission (SEC) so that stock that the co-conspirators controlled could be sold to the public.  Meanwhile, the co-conspirators, including Learned Hand, who had been named Crown’s CEO, orchestrated the distribution of press releases containing false and misleading statements regarding patented drug delivery technology purportedly owned by Crown.  Crown’s share price and trading volume shot up as a result of the hype created by the false press and a related promotional campaign, and the co-conspirators, including Adam Hand, then proceeded to sell millions of shares of Crown stock to unwitting investors at inflated prices.  The superseding indictment further alleges that later, in March 2016, after he had already been indicted for his alleged involvement in the Greenway Technology scheme, Jehu Hand deleted thousands of electronic records in an effort to obstruct the government’s ongoing investigation of his activities.      

According to court documents, the conspirators’ sales of Crown stock often occurred after the dissemination of blast e-mails touting Crown’s stock to investors. 

These charges arise out of a multi-year investigation focusing on preventing fraud in the microcap stock markets.  Microcap companies are small publicly traded companies whose stock often trades at pennies per share.  Fraud in the microcap markets is of increasing concern to regulators as such markets have proven to be fertile grounds for fraud and abuse.  This is, in part, because accurate information about microcap stocks may be difficult for the average investor to find, since many microcap companies do not file financial reports with the SEC.

The United States Attorney’s Office received valuable assistance from the SEC during the investigation of this matter. 

The charge of conspiracy provides for a sentence of no greater than five years in prison, three years of supervised release and a fine of $250,000 or twice the gross gain or loss.  The charges of securities fraud and wire fraud provide for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $250,000 or twice the gross gain or loss.  The charge of destruction of records in a federal investigation provides for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $250,000.  Actual sentences for federal crimes are typically less than the maximum penalties.  Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Carmen M. Ortiz and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today.  The case is being prosecuted by Assistant U.S. Attorney Vassili Thomadakis of Ortiz’s criminal division and SEC attorneys Andrew Palid and Eric Forni, who were appointed as Special Assistant U.S. Attorneys.

The details contained in the charging documents are allegations.  The defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law. 

If you purchased shares of Crown between September 2012 and July 2013 and believe that you may be a victim of the alleged scheme, please contact the United States Attorney’s Office at

Financial Fraud
Updated August 2, 2016