Former Jamestown Man Pleads Guilty To Pump And Dump Securites And Tax Fraud
CONTACT: Barbara Burns
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BUFFALO, N.Y.–U.S. Attorney William J. Hochul, Jr. announced today that Eric C. Cusimano, 33, of Lakeway, Texas, pleaded guilty before U.S. District Court Judge Richard J. Arcara, to conspiracy to commit securities fraud and tax evasion. Each charge carries a maximum sentence of five years in prison and a fine of $250,000.
“Because of the relentless quest of some to steal your money, it is imperative that those planning to invest their hard earned resources be equally diligent when considering their investment strategy,” said U.S. Attorney Hochul. “For our part, this Office will continue to aggressively pursue individuals who perpetrate financial frauds, whether such criminals are located in this country or abroad.”
Assistant U.S. Attorney Aaron J. Mango, who is handling the case, stated that between September 2009 and January 9, 2012, the defendant and others participated in a stock fraud scheme that utilized several websites registered through an internet domain registrar and web hosting company. The scheme was designed to fraudulently inflate the prices of publically traded stocks of companies, generally stocks of companies with low stock prices (“penny stocks”). Investors were deceived into believing that prices at which they bought and sold the stocks were determined by supply and demand, not rigged by manipulators. Such a scheme is frequently referred to as “pump-and-dump.”
One of the websites involved in this scheme was www.bestdamnpennystocks.com. The website was used to tout approximately 52 penny stocks. During the course of the scheme, Cusimano and others were compensated by third-parties to tout certain penny stocks. In total, the defendant was compensated $1,218,783 during the course of the scheme which involved at least 250 victims.
Furthermore, during the tax years 2008 to 2011, Cusimano owned and operated Premire Consulting, Inc., which was utilized to promote penny stocks. During these years, Premire received from the defendant’s penny stock promotion business, unreported gross receipts totaling $7,921,706, and corrected taxable income totaling $1,218,783. As a result of the unreported income, the total tax due and owing is $657,005.
As part of his plea, the defendant forfeited $1,218,783.00 in United States currency as well as two pieces of property in the Southern Tier, a 26’ Pontoon boat, several valuable pieces of jewelry and approximately $340,000 from accounts he held in Panama and Belize. The money from the bank accounts was seized by the United States Attorneys Office earlier this year utilizing a repatriation order. It marked the first time that this much money has been repatriated back to the Western District of New York.
The plea is the culmination of an investigation on the part of the United States Secret Service, under the direction Acting Special Agent in Charge Michael Adelizzio, the Internal Revenue Service, Criminal Investigation Division, under the direction of Shantelle P. Kitchen, Acting Special Agent in Charge, New York Field Office Charge, and Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge James C. Spero. Assistance was also provided by the Financial Industry Regulatory Authority.
Sentencing is scheduled for March 26, 2015 at 1:00 p.m. before Judge Arcara.