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Press Release

Former Chief Executive of Suburban Nutrition Company Pleads Guilty in Market Manipulation Scheme

For Immediate Release
U.S. Attorney's Office, Northern District of Illinois

CHICAGO — The former Chief Executive Officer of a northwest suburban nutrition company has pleaded guilty to securities fraud for engaging in a market manipulation scheme to artificially inflate the company’s stock price.

ANDREW J. KANDALEPAS, 67, of Schaumburg, pleaded guilty Tuesday to one count of securities fraud.  U.S. District Judge Gary Feinerman set sentencing for Sept. 5, 2019.

The guilty plea was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the FBI.  The U.S. Securities and Exchange Commission provided valuable assistance.  The government is represented by Assistant U.S. Attorneys John D. Mitchell and William Hogan.

Kandalepas was the CEO, President and Chairman of the Board for Wellness Center USA Inc., whose principal place of business was in Hoffman Estates.  The company raised more than $19 million from investors through the sale of common stock, and Kandalepas himself held more than three million shares.  Kandalepas admitted in a plea agreement that from December 2012 to June 2015, he bought and sold Wellness Center shares for the purpose of artificially inflating the stock price. 

Many of his trades occurred at or near the close of normal trading hours in a form of market manipulation known as “marking the close.”  According to an example cited in the plea agreement, Kandalepas, using a brokerage account in the name of an acquaintance, executed a trade to buy 300 Wellness Center shares within the last five seconds of the trading day on May 4, 2015.  The trade artificially raised Wellness Center’s share price by 4%, from $0.27 to $0.28, causing a profit for Kandalepas of approximately $30,000.

In all, Kandalepas netted at least $136,176 in trading profits for his personal use.

Securities fraud is punishable by up to 20 years in prison.  The Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

Updated June 13, 2019

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Financial Fraud
Securities, Commodities, & Investment Fraud