Leader Of “Pump And Dump” Securities Fraud Scheme Pleads Guilty

Damian Williams, the United States Attorney for the Southern District of New York, announced that EARL INGARFIELD pled guilty today to participating in a “pump and dump” stock fraud scheme designed to target retail investors and manipulate trading in penny stock shares of Suburban Minerals Corporation (“SUBB”). 

U.S. Attorney Damian Williams said: “Earl Ingarfield engaged in a classic pump and dump scheme where the price of stock for a worthless company was inflated with paid promotions and fairy tales of riches from a $5 billion African diamond mine.  Today’s plea is a reminder that the Southern District of New York will investigate and prosecute all such pernicious market manipulation schemes.”

According to the Indictment and statements made in court:

From at least in or about 2013 through at least in or about March 2014, EARL INGARFIELD engaged in a scheme to manipulate the stock price of SUBB, a public company traded on the over-the-counter market.  In or about 2013, the defendant obtained control of SUBB, installing management at the company that acted at his direction and financing SUBB’s operations.  INGARFIELD also obtained convertible promissory notes issued by SUBB, which he then converted into tens of millions of SUBB shares that were nominally held by offshore shell entities.  INGARFIELD used these shell entities to conceal his involvement and the fact that he owned and controlled the vast majority of the shares of SUBB. 

In early 2014, at INGARFIELD’s direction, SUBB announced that it was purportedly acquiring a producing African diamond mine worth $5 billion.  But in reality, no such mine existed.  Between January 2014 and March 2014, SUBB issued a series of press releases making false representations regarding that purported mine acquisition and SUBB’s operations.  During the same time period, INGARFIELD orchestrated a marketing campaign through which promotional materials echoing the same false claims were distributed to the investing public by email.  The false and misleading press releases and email marketing campaign caused SUBB’s share price and trading volume to become artificially inflated.

While SUBB’s price was artificially inflated, INGARFIELD profited by selling millions of his secretly amassed shares, all at the expense of the investing public.  Between January and March 2014, he made more than $1.4 million from the sale of SUBB shares.

On March 7, 2014, the Securities and Exchange Commission halted trading in SUBB, after which the share price dropped precipitously and never recovered.    

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EARL INGARFIELD, 64, of Las Vegas, Nevada, pled guilty to one count of conspiracy to commit securities fraud, which carries a maximum sentence of five years in prison, and agreed to forfeiture of $1,418,473. 

The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.

Mr. Williams praised the outstanding work of Homeland Security Investigation’s El Dorado Task Force. 

The matter is being handled by the Money Laundering and Transnational Criminal Enterprises Unit.  Assistant U.S. Attorneys Emily Deininger and Shiva Logarajah are in charge of the prosecution.