United States v. Frederick L. Sharp, et al.; United States v. Roger Knox, United States v. Richard Targett-Adams

The government alleges that the defendants in the above-referenced actions participated in a conspiracy to commit securities fraud in which ownership and control of dozens of publicly traded companies was disguised so that, among other things, criminal control groups could engage in pump-and-dump schemes and other forms of market manipulation in the companies’ microcap securities. These microcap securities, also known as “penny stocks,” primarily traded on the over the counter market.

On January 5, 2024, the Court in the Roger Knox matter entered an order of restitution awarding $58,046,278.24 to 8.051 victims.  The victims are those who purchased stock in one or more of the following stocks during the period of the fraud and were determined to have lost money: ARSN, DIGAF, EPTI, FTWS, GRMX, KOVR, NEXS, OLMM, ORRP, PSCR, PSNX, RETC, SPRN, STVA, TTSI, UMFG, and VBIO.  To identify the victims, the government, with the assistance of a forensic accounting firm, analyzed trading records associated with the securities involved in the alleged scheme and identified those individuals who lost at least $25 as a result of the scheme. Ultimately, the Court in the Roger Knox matter only ordered restitution to a subset of the victims identified by the government.  Given the large number of victims identified (approximately 20,000), the Court ordered restitution only to those victims whose losses exceeded $500.  Victims whose losses did not exceed $500 were not awarded restitution due to the practical limitations associated with attempting to facilitate restitution payments to such a large victim pool.

The government has retained a third-party claims administrator to facilitate payments to those victims identified in the Court's restitution order. Given the large number of victims, the government anticipates the claims administration process to take time. While a precise timeline cannot be provided, the government is committed to processing payments as promptly as possible. Payments made to the victims will be made on a pro rata basis based on the total funds collected by the government. To the extent additional funds are collected in the future, the Government will facilitate additional payments on a pro rata basis to the victims who were awarded restitution.  At this time, the government is unable to provide an exact anticipated date by when the payments will be processed.  
 

Case Status

Roger Knox (Docket: 18-CR-10385)

The defendant was sentenced on October 13, 2023 and ultimately received a sentence of 24 months in prison.  He was also ordered to pay forfeiture in the amount of $10,909,709 and restitution in the amount of $ 58,046,278.24 to 8,051 victims.

Richard Targett-Adams (Docket: 19-CR-10046)

The defendant was sentenced on November 21, 2024, to a period of time-served imprisonment plus a period of three years of supervised release.

Frederick L. Sharp, Luis Carrillo, Mike K.G. Veldhuis, Paul Sexton, and Courtney Kelln (Docket: 24-CR-10002)

A federal grand jury returned an indictment against the defendants on January 9, 2024.  The defendants have not yet made an initial appearance in Court.