Jury Convicts Brothers Who Conducted Pump and Dump Scheme on Company that Sold Home COVID-19 Tests
For Immediate Release
U.S. Attorney's Office, Southern District of California
NEWS RELEASE SUMMARY – June 22, 2023
SAN DIEGO – A federal jury has convicted brothers Joshua Yafa and Jamie Yafa, both Florida citizens, of participating in a securities fraud pump-and-dump scheme surrounding the publicly-traded stock of two small companies.
The jury found that the Yafa brothers both committed securities fraud by manipulating the market for the stock of Global Wholehealth Partners Corp. and Nunzia Pharmaceutical Corp. According to the evidence presented at trial, the Yafas worked alongside their co-conspirators to artificially inflate the price and volume of these companies’ stocks by controlling the majority of the company’s free-trading shares through concealed nominee accounts, coordinating the company’s press releases with the issuance of penny stock newsletters, paying analysts to write rosy reports about the companies, and using call rooms, all to create a buying frenzy for the stocks among unwitting investors.
The FBI investigated this case through a combination of forensic analysis and sophisticated covert techniques, including the use of an undercover agent and an informant, both of whom gathered evidence through recorded phone conversations and captured email and text messages.
Central to the scheme were penny stock newsletters that the Yafas created and emailed to thousands of investors. In a single six-month period, for example, the Yafas distributed 116 newsletters touting the stock of Global Wholehealth Partners. The newsletters were sent under various publication names, including OTC Tip Reporter, BuzzStocks, marketCALIBER, and Penny Stock Prophet, but the publications often carried virtually the same content, and always predicted tremendous investment returns; this despite the fact that Global Wholehealth Partners was severely underfunded and had made only a handful of sales in its entire existence.
The conspirators focused heavily on touting Global Wholehealth Partners because the company purported to have access to an early COVID-19 testing product that it could sell to consumers. They hoped that creating excitement among investors about the company’s stock based on the pandemic would make their pump-and-dump scheme extremely profitable.
The Yafas were just two of several defendants who were charged. Their co-conspirators, Brian Volmer and Carl Marciniak of Nevada, and Charles Strongo of Calfornia, all previously pleaded guilty in connection with the scheme.
“This verdict should send a clear message: Pump-and-dump and similar market manipulation schemes are serious crimes, and the Department of Justice will continue to hold those who engage in these schemes accountable,” said U.S. Attorney Randy Grossman.” Grossman thanked the prosecution team and FBI agents who diligently pursued this matter.
“The FBI remains committed to aggressively pursuing individuals like the Yafa brothers who intentionally degrade the integrity of the United States financial markets,” said FBI San Diego Special Agent in Charge Stacey Moy. “Market manipulation schemes can be devastating for the victims they affect, and we will continue to collaborate with our local, state and federal partners to hold those who perpetrate them accountable.”
The U.S. Attorney’s Office expresses its appreciation for assistance provided by the Securities and Exchange Commission, and FINRA’s Criminal Prosecutions Assistance Group.
Joshua and Jamie Yafa are scheduled to be sentenced on September 25, 2023.
DEFENDANTS Case Number 21CR1310-WQH
Joshua Yafa Age: 49 Boca Raton, FL
Jamie Yafa Age: 44 Kissimmee, FL
SUMMARY OF CHARGES
Securities Fraud – Title 15, U.S.C., Section 78(j)
Conspiracy to Commit Securities Fraud – Title 18., U.S.C., Section 371
Maximum Penalty: Twenty years in prison
Federal Bureau of Investigation
Assistant U. S. Attorneys Aaron P. Arnzen (619) 546-8384 and George Manahan (619) 546-7607
Updated June 22, 2023
Press Release Number: CAS23-0622-Yafa
Securities, Commodities, & Investment Fraud