Score:   1
Docket Number:   SD-FL  1:18-cr-20336
Case Name:   USA v. Delaney Equity Group LLC
  Press Releases:
A South Florida securities broker-dealer has been charged with participating in a conspiracy to unlawfully sell unregistered securities.  This conduct was part of a scheme to sell shares of fraudulently registered companies that could then be used for pump and dump and other stock manipulation schemes. 

            Randy A. Hummel, First Assistant U.S. Attorney, U.S. Attorney’s Office, Southern District of Florida, and Robert F. Lasky, Special Agent in Charge, FBI Miami Field Office, made the announcement.  

            Delaney Equity Group LLC, a registered broker-dealer based in Palm Beach Gardens, was charged by a criminal information with one count of conspiracy to unlawfully sell unregistered securities, in violation of Title 18, United States Code, Section 371, in Case No. 18-CR-20336.   The defendant company faces a maximum statutory sentence of five years of probation and a fine up to $500,000 or double the proceeds of the offense.  The case is assigned to U.S. District Judge Cecilia M. Altonaga in Miami.

            According to court documents, including the charging information, from October 2009 through at least June 2013, Delaney Equity Group LLC (“Delaney Equity”), through certain employees including Ian C. Kass, participated in a conspiracy to sell shares of bogus microcap companies, knowing that the companies had been created using nominee officers and were secretly controlled by shell principals Steven Sanders, Daniel McKelvey, and Alvin S. Mirman.  The shell principals would fraudulently create public companies, known as issuers, by filing documents with the SEC that falsely described the companies and their share ownership.  These documents would indicate that the companies were controlled by a nominee, or straw chief executive officer (CEO).  The straw CEO would be listed as the owner of the control block, or restricted shares, but in reality the companies were controlled by the principals.  The principals would also create documents with the names of various shareholders for each company, to make it appear that these shares were owned by persons unaffiliated with the company.  These shares would later be classified as unrestricted or “free trading.”  Thereafter, the principals would sell the companies to criminal actors who would secretly obtain the control shares and the purported “free trading” shares, without disclosure to the U.S. Securities and Exchange Commission (SEC) or the investing public.  This would allow the buyers to engage in stock manipulation schemes using the purported “free trading” shares. 

            According to the allegations in the information, Delaney Equity was a securities broker-dealer that was registered with the SEC and was a market maker for penny stocks in the over-the-counter securities markets.  Acting at the direction of the shell principals, Delaney Equity sponsored nine fraudulent shell companies for electronic trading, and facilitated the sale of shares of these bogus entities to criminal actors.   According to court documents, Delaney Equity utilized fraudulent paperwork to deposit shares into broker accounts in the names of the fraud principals, including Steven Sanders, Daniel McKelvey, and Alvin S. Mirman.  Delaney Equity also obtained authorization from the Financial Industry Regulatory Authority (FINRA) for shares of the companies to be electronically traded.  Delaney Equity also opened brokerage accounts for the shell principals and deposited shares of the bogus entities into these accounts, later selling the shares to the investing public knowing that the companies were sham entities with nominee officers.   These activities, according to allegations in the information, facilitated the unlawful sale of securities that should have been classified as restricted, facilitating the securities fraud scheme.

            Ten other defendants have been convicted in connection with the Shell Factory Fraud investigation: John Ahearn and Andrew Wilson, Case No. 17-20883-CR-KMW; Yelena Furman, Case No. 17-20713-CR-CMA; David Lubin, Case No. 17-20508-CR-MGC; Sheldon Rose and Ian Kass, Case No. 16-20706-CR-JEM; Steven Sanders and Alvin S. Mirman, Case No. 16-20572-CR-CMA; and, Daniel McKelvey and Jeffrey Lamson, Case No. 16-20546-CR-RNS. 

A criminal information is a charging instrument containing allegations.  Every defendant is presumed innocent unless and until found guilty in a court of law.

Mr. Hummel commended the investigative efforts of the FBI’s Miami Field Office.  Mr. Hummel also thanked the SEC’s Miami Regional Office for their assistance.  The SEC previously filed a parallel administrative enforcement proceeding related to this matter.  This case is being prosecuted by Assistant U.S. Attorney Jerrob Duffy.

Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

Docket (0 Docs):   https://docs.google.com/spreadsheets/d/1chaW14Fm66wfz_TJQccS_ufbROcgwY_yEPIxrSKtNp0/edit#gid=0
  Last Updated: 2020-09-18 07:12:10 UTC
Description: The fiscal year of the data file obtained from the AOUSC
Format: YYYY

Description: The code of the federal judicial circuit where the case was located
Format: A2

Description: The code of the federal judicial district where the case was located
Format: A2

Description: The code of the district office where the case was located
Format: A2

Description: Docket number assigned by the district to the case
Format: A7

Description: A unique number assigned to each defendant in a case which cannot be modified by the court
Format: A3

Description: A unique number assigned to each defendant in a case which can be modified by the court
Format: A3

Description: A sequential number indicating whether a case is an original proceeding or a reopen
Format: N5

Description: Case type associated with the current defendant record
Format: A2

Description: A concatenation of district, office, docket number, case type, defendant number, and reopen sequence number
Format: A18

Description: A concatenation of district, office, docket number, case type, and reopen sequence number
Format: A15

Description: The status of the defendant as assigned by the AOUSC
Format: A2

Description: A code indicating the fugitive status of a defendant
Format: A1

Description: The date upon which a defendant became a fugitive
Format: YYYYMMDD

Description: The date upon which a fugitive defendant was taken into custody
Format: YYYYMMDD

Description: The date when a case was first docketed in the district court
Format: YYYYMMDD

Description: The date upon which proceedings in a case commenced on charges pending in the district court where the defendant appeared, or the date of the defendant’s felony-waiver of indictment
Format: YYYYMMDD

Description: A code used to identify the nature of the proceeding
Format: N2

Description: The date when a defendant first appeared before a judicial officer in the district court where a charge was pending
Format: YYYYMMDD

Description: A code indicating the event by which a defendant appeared before a judicial officer in the district court where a charge was pending
Format: A2

Description: A code indicating the type of legal counsel assigned to a defendant
Format: N2

Description: The title and section of the U.S. Code applicable to the offense committed which carried the highest severity
Format: A20

Description: A code indicating the level of offense associated with FTITLE1
Format: N2

Description: The four digit AO offense code associated with FTITLE1
Format: A4

Description: The four digit D2 offense code associated with FTITLE1
Format: A4

Description: A code indicating the severity associated with FTITLE1
Format: A3

Description: The FIPS code used to indicate the county or parish where an offense was committed
Format: A5

Description: The date of the last action taken on the record
Format: YYYYMMDD

Description: The date upon which judicial proceedings before the court concluded
Format: YYYYMMDD

Description: The date upon which the final sentence is recorded on the docket
Format: YYYYMMDD

Description: The date upon which the case was closed
Format: YYYYMMDD

Description: The number of days from the earlier of filing date or first appearance date to proceeding date
Format: N3

Description: The number of days from proceeding date to disposition date
Format: N3

Description: The number of days from disposition date to sentencing date
Format: N3

Description: The code of the district office where the case was terminated
Format: A2

Description: A code indicating the type of legal counsel assigned to a defendant at the time the case was closed
Format: N2

Description: The title and section of the U.S. Code applicable to the offense that carried the most severe disposition and penalty under which the defendant was disposed
Format: A20

Description: A code indicating the level of offense associated with TTITLE1
Format: N2

Description: The four digit AO offense code associated with TTITLE1
Format: A4

Description: The four digit D2 offense code associated with TTITLE1
Format: A4

Description: A code indicating the severity associated with TTITLE1
Format: A3

Description: The code indicating the nature or type of disposition associated with TTITLE1
Format: N2

Description: The number of months a defendant was sentenced to prison under TTITLE1
Format: N4

Description: The number of months of probation imposed upon a defendant under TTITLE1
Format: N4

Description: A code indicating whether the probation sentence associated with TTITLE1 was concurrent or consecutive in relation to the other counts in the indictment or information or multiple counts of the same charge
Format: A4

Description: A period of supervised release imposed upon a defendant under TTITLE1
Format: N3

Description: The fine imposed upon the defendant at sentencing under TTITLE1
Format: N8

Description: The total probation time for all offenses of which the defendant was convicted and probation was imposed
Format: N4

Description: The total fine imposed at sentencing for all offenses of which the defendant was convicted and a fine was imposed
Format: N8

Description: A count of defendants filed including inter-district transfers
Format: N1

Description: A count of defendants filed excluding inter-district transfers
Format: N1

Description: A count of original proceedings commenced
Format: N1

Description: A count of defendants filed whose proceedings commenced by reopen, remand, appeal, or retrial
Format: N1

Description: A count of defendants terminated including interdistrict transfers
Format: N1

Description: A count of defendants terminated excluding interdistrict transfers
Format: N1

Description: A count of original proceedings terminated
Format: N1

Description: A count of defendants terminated whose proceedings commenced by reopen, remand, appeal, or retrial
Format: N1

Description: A count of defendants pending as of the last day of the period including long term fugitives
Format: N1

Description: A count of defendants pending as of the last day of the period excluding long term fugitives
Format: N1

Description: The source from which the data were loaded into the AOUSC’s NewSTATS database
Format: A10

Description: A sequential number indicating the iteration of the defendant record
Format: N2

Description: The date the record was loaded into the AOUSC’s NewSTATS database
Format: YYYYMMDD

Description: Statistical year ID label on data file obtained from the AOUSC which represents termination year
Format: YYYY

Data imported from FJC Integrated Database
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