Following a six-week trial, a federal jury in Central Islip, New York returned a guilty verdict today on all counts against former registered stock brokers Jeffrey Chartier and Lawrence Isen for their roles in a conspiracy to manipulate and fraudulently promote shares of publicly traded companies Hydrocarb Energy Corp. (HECC), CES Synergies, Inc. (CESX), National Waste Management Holdings, Inc. (NWMH) and Intelligent Content Enterprises, Inc. (ICEIF).  Specifically, the defendants were convicted of money laundering conspiracy, wire fraud conspiracy, securities fraud conspiracy, securities fraud and money laundering.  Chartier was additionally convicted of attempted obstruction of an official proceeding based upon lies he told to the Federal Bureau of Investigation (FBI) after his arrest in this case.  

When sentenced by United States District Judge Joanna Seybert, the defendants each face a maximum sentence of more than 20 years’ imprisonment.

Richard P. Donoghue, United States Attorney for the Eastern District of New York, announced the verdict.

“Chartier, Isen and their co-conspirators lied to investors, including elderly victims, but the jurors here saw the truth – that these defendants were brazenly stealing money through fraudulent investment schemes,” stated United States Attorney Donoghue.  Mr. Donoghue thanked the FBI for leading the investigation, and expressed his appreciation to the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority, Inc., Criminal Prosecution Assistance Group (FINRA CPAG) for their cooperation and assistance.

From 2013 to 2017, Chartier, Isen and two boiler rooms located in Plainview and Melville, New York – known as, among other names, Elite Stock Research and Power Traders Press – artificially inflated the price and trading volume of the four stocks.  They did so through a cold-calling campaign that used lies and high-pressure sales tactics to lure victims, many of whom were elderly, into purchasing stock.  The conspiracy’s market manipulation fraudulently inflated the stock price of the four stocks by more than $147 million.   

Chartier, who became a major shareholder in CESX and NWMH after persuading those companies to retain him to help take them public, used the boiler rooms to dump nearly $2 million worth of those companies’ shares on unsuspecting victims.  He also sold stock to individuals in private transactions without telling them that the stock had been manipulated to trade at an artificially high price and volume.  Using some of the proceeds from his fraudulent scheme, he purchased a $350,000 luxury RV equipped with a flat screen television and a fireplace, which he used as a traveling office.

After Chartier was arrested in July 2017, and after waiving his Miranda rights, he lied to FBI Special Agents about his and others’ involvement in the scheme, including that he sold NWMH shares only via purchase agreements.

Isen, who was barred from acting as a broker by FINRA in 1996 and convicted of wire fraud conspiracy in the Southern District of New York in 2000, orchestrated the manipulation of stock belonging to, among others, major HECC shareholder Michael Watts and major ICEIF shareholders located in India.  Watts was previously convicted in October 2019 for his role in the stock manipulation scheme following a month-long jury trial and is awaiting sentencing.

Chartier and Isen are the 15th and 16th defendants convicted in this case.  Four defendants have been sentenced for their roles in the scheme:  Ronald Hardy was sentenced to 10 years’ imprisonment; Dennis Verderosa was sentenced to six years’ imprisonment; McArthur Jean was sentenced to four years’ imprisonment; and Emin Cohen was sentenced to two years’ imprisonment.

The government’s case is being handled by the Office’s Business and Securities Fraud Section.  Assistant United States Attorneys Whitman G.S. Knapp and Kaitlin T. Farrell are in charge of the prosecution.  Assistant United States Attorney Tanisha R. Payne of the Office’s Asset Forfeiture Section is handling the forfeiture matters.

The Defendants:

JEFFREY CHARTIER

Age: 56

Los Angeles, California

LAWRENCE ISEN

Age: 66

San Diego, California

Defendants Who Were Previously Convicted:

RONALD HARDY

Age:  44

Port Jefferson, New York

MCARTHUR JEAN (also known as “John McArthur”)

Age:  37

Dix Hills, New York

STEPHANIE LEE

Age: 48

St. Petersburg, Florida

ERIK MATZ

Age:  46

Mt. Sinai, New York

BRIAN HEEPKE (also known as “Brian Targis”)

Age:  39

Farmingdale, New York

DENNIS VERDEROSA

Age:  79

Coram, New York

EMIN L. COHEN (also known as “Ian Grant”)

Age:  36

Coram, New York

PAUL EWER

Age:  39

Massapequa, New York

ASHLEY ANTOS

Age:  28

Central Islip, New York

SERGIO RAMIREZ

Age:  46

East Meadow, New York

ROBERT GILBERT

Age:  53

Cold Spring Harbor, New York

ANTHONY VASSALLO

Age:  56

Farmingdale, New York

MICHAEL WATTS

Age:  63

Sugarland, Texas

Docket No. 17-CR-372 (S-3) (JS)

Earlier today, in federal court in Central Islip, an indictment was unsealed charging Benjamin Conde, Chief Executive Officer of Essex Global Investments and President of Facultas Capital Management, and Lawrence Isen, the owner of Marketbyte, LLC, a purported stock promotion firm, with conducting a “pump and dump” scheme to defraud investors in Renewable Energy and Power, Inc. (RBNW).  ​The charges include conspiracy to commit securities fraud, conspiracy to commit wire fraud, conspiracy to commit money laundering and substantive securities fraud.  The defendants were arrested this morning and Conde will be arraigned this afternoon before United States District Judge Joanna Seybert at the United States Courthouse in Central Islip.  Isen’s appearance for removal to the Eastern District of New York is scheduled for this afternoon at the federal courthouse in San Diego, California.       

​​Richard P. Donoghue, United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the charges.

“As alleged, Conde and Isen joined forces with a ‘boiler room’ crew to defraud investors, many of them elderly, and enrich themselves at the expense of their victims,” stated United States Attorney Donoghue.  “The Department of Justice has made it a priority to hold accountable those who use our financial markets as a venue to lie, cheat and steal.”  Mr. Donoghue expressed his grateful appreciation to the United States Securities and Exchange Commission for its significant cooperation and assistance in the investigation. 

​​As alleged in the indictment, between March 2017 and July 2017, Conde and Isen hired a purported financial services business in Melville, New York, known by a number of names including My Street Research, that operated as a high pressure “boiler room.”  The boiler room engaged in a pump and dump scheme to defraud investors in RBNW.  As part of the scheme, the defendants and their co-conspirators artificially controlled the price and volume of traded shares and made misrepresentations to victim investors, many of whom were senior citizens, relating to the advisability of purchasing RBNW stock and its profitability.  The scheme generated over $3.1 million in trading profits for the defendants and their co-conspirators and losses for the victim investors when the stock price plummeted.

The defendants attempted to conceal the scheme by laundering approximately $2.8 million in fraudulently obtained proceeds.

The charges in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty.  If convicted, Conde and Isen each face up to 20 years’ imprisonment.

​​The government’s case is being handled by the Office’s Long Island Criminal Division.  Assistant United States Attorney Erin E. Argo is in charge of the prosecution.

The Defendants:

BENJAMIN CONDE

Age: 56

Fairfield, New Jersey

LAWRENCE ISEN

Age: 66

San Diego, California

E.D.N.Y. Docket No. 19-CR-432 (JS)

                        A nine-count indictment was unsealed this morning in federal court in Brooklyn, New York, against 14 defendants: Jeffrey Chartier, Stephanie Lee, Lawrence Isen and Robert Gleckman, insiders and marketers of five publicly traded companies whose stock the defendants manipulated; Erik Matz and Ronald Hardy, managers of My Street Research and its predecessors (the “Boiler Room”); Brian Heepke, Dennis Verderosa, Emin L. Cohen, Paul Ewer, McArthur Jean, and Sergio Ramirez, Boiler Room cold-callers; Anthony Vassallo, owner of Elite Stock Research (“ESR”); and Robert Gilbert, owner of Accredited Investor Preview (“AIP”).[1] 

                        The charges include conspiracy to commit securities fraud, conspiracy to commit wire fraud, conspiracy to commit money laundering, and substantive securities fraud in connection with the stock manipulation of five publicly traded companies – National Waste Management Holdings, Inc., trading under the ticker symbol NWMH; CES Synergies, Inc., trading under the ticker symbol CESX; Grilled Cheese Truck, trading under the ticker symbol GRLD; Hydrocarb Energy Corporation, trading under the ticker symbol HECC; and Intelligent Content Enterprises, Inc., trading under the ticker symbol ICEIF.  In addition, the government restrained Matz’s residence in Mt. Sinai, New York, Isen’s residence in San Diego, California, and a co-conspirator’s residence in Hicksville, New York, and seized bank accounts containing alleged criminal proceeds and automobiles purchased with alleged criminal proceeds.

                         Matz, Hardy, Heepke, Verderosa, Cohen, Ewer, Jean, Ramirez, Vassallo, and Gilbert will be arraigned this afternoon before Magistrate Judge Robert M. Levy, at the United States Courthouse in Brooklyn.  Chartier’s and Gleckman’s initial appearance for removal proceedings to the Eastern District of New York is scheduled for this afternoon at the United States Courthouse, 312 North Spring Street, Los Angeles, California.  Lee’s initial appearance for removal proceedings to the Eastern District of New York is scheduled for this afternoon at the United States Courthouse, 801 North Florida Avenue, Tampa, Florida.  Isen’s initial appearance for removal proceedings to the Eastern District of New York is scheduled for this afternoon at the United States Courthouse, 333 W. Broadway, San Diego, California.  

                        The indictment was announced by Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI).

                        “As alleged, the defendants designed an elaborate, fraudulent scheme, to defraud the investing public, preying, in particular, upon unsuspecting and elderly investors.  Specifically, the defendants obtained shares from corporate insiders at below-market prices and engaged in manipulative trading patterns to drive up the price of the shares, while aggressively and repeatedly calling and emailing victims to purchase those shares,” stated Acting United States Attorney Rohde.  “Today’s 14 arrests, in three states, reflect the scope of this fraud and our commitment to aggressively locating and bringing to justice those who abuse our financial markets in order to fraudulently enrich themselves.”  Ms. Rohde expressed her grateful appreciation to the FBI and the United States Securities and Exchange Commission for their significant cooperation and assistance in the investigation.

                         “Manipulating stock prices, as alleged in this case, to appear more attractive to investors, is a deliberate attempt at sabotaging fair market trading,” stated Assistant Director-in-Charge Sweeney.  “And manipulation, at its core, is a true act of deception, especially when the elderly are targeted.  This scheme involved an incredible amount of money, more than $147 million. That's no small change for even the savviest investor.  As evidenced by our arrests today, we take these matters seriously, and will continue to pursue those who make victims out of unwitting participants in these schemes.”

Overview

                        As alleged in the indictment and court proceedings, between January 2014 and July 2017, the defendants, together with others, engaged in a $147 million scheme to defraud investors and potential investors in, among other companies, one or more of the following publicly traded companies: NWMH, CESX, GRLD, HECC, and ICEIF (collectively, the “Manipulated Public Companies”), by artificially controlling the price and volume of traded shares in the Manipulated Public Companies through, among other things, (a) artificially generating price movements and trading volume in the shares, and (b) material misrepresentations and omissions in their communications with victim investors about the stock of the Manipulated Public Companies, relating to, among other things, the advisability of purchasing such stock.  To execute this scheme, the defendants fraudulently concealed their control of shares of the Manipulated Public Companies that were held in brokerage accounts in the names of other individuals or entities.  In addition, in or about and between 2014 and 2017, defendants Chartier, Lee, Isen, Matz, and Hardy engaged in a scheme to launder approximately $14,714,493 in proceeds of the foregoing stock manipulation schemes.

The Stock Manipulation Scheme

                        In order to carry out the fraudulent pump and dump scheme, employees of the Boiler Room based in Melville, New York, obtained shares from insiders at the Manipulated Public Companies, including the defendants Chartier, Lee and Gleckman, at below-market prices through stock purchase and consulting agreements.  Once employees of the Boiler Room obtained shares in the Manipulated Public Companies, the defendants engaged in manipulative trading patterns including wash trades and matched trades to drive up the price of the shares, while aggressively and repeatedly calling and emailing victims – many of whom were senior citizens – to purchase shares in the Manipulated Public Companies.  When victims indicated a willingness to purchase a recommended stock, the defendants and their co-conspirators at the Boiler Room called the victims repeatedly, pressured them to follow through with their purchases and directed them to log into their trading accounts while still on the telephone to place purchase orders for the relevant stock.  Many of the victims ultimately purchased stock in more than one of the Manipulated Public Companies.  In some cases, the Boiler Room also charged the victims for “subscriptions” to receive stock recommendations. 

                        The defendants did not disclose to the victims that, contemporaneously with or shortly after their recommendation to the victims of the stocks of the Manipulated Public Companies, the defendants and their co-conspirators sold their own shares in the same companies.  The victims therefore were left with the false and misleading impression that the stocks of the Manipulated Public Companies were sound investments in which the defendants and their co-conspirators themselves firmly believed.

                        The defendants’ deceptive practices included using false names or the names of co-conspirators instead of their true names during their communications with victims.  The defendants Matz, Heepke, Cohen and Jean most frequently employed those tactics by providing false names to victims and by using email addresses in other individuals’ names when communicating with victim investors.  In addition, the defendants directed and controlled trading in shares of the Manipulated Public Companies in brokerage accounts with names that were not associated with themselves or the Boiler Room.  Such trading, which included matching trades of both victims and co-conspirators as part of the scheme to manipulate the stock of the Manipulated Public Companies, appeared not to be linked to the defendants or the Boiler Room.       

The Money Laundering Scheme

                        Between 2014 and 2017, the defendants Chartier, Lee, Isen, Matz and Hardy engaged in a scheme to launder approximately $14,714,493 in proceeds of the fraudulent schemes to manipulate the share prices of NWMH, CESX, GRLD, HECC and ICEIF.  They laundered proceeds of their pump and dump schemes by transferring the proceeds from brokerage accounts that they and their co-conspirators controlled through, among other things, bank accounts in the names of companies controlled by the co-conspirators and other individuals, or by generating invoices to lend the appearance of legitimacy to the transactions. 

The government’s case is being handled by the Office’s Business and Securities Fraud Section.  Assistant United States Attorneys Alicyn L. Cooley and Patrick T. Hein are in charge of the prosecution. Assistant U.S. Attorney Tanisha R. Payne is handling the forfeiture aspects of the case.

The Defendants:



JEFFREY CHARTIER

Age: 53

Residence: Los Angeles, California

STEPHANIE LEE

Age: 46

Residence: St. Petersburg, Florida

LAWRENCE ISEN

Age: 63

Residence: San Diego, California

ROBERT GLECKMAN

Age: 52

Residence: Tarzana, California

ERIK MATZ

Age: 44

Residence: Mt. Sinai, New York

RONALD HARDY

Age: 42

Residence: Port Jefferson, New York

BRIAN HEEPKE, also known as “Brian Targis”

Age: 36

Residence: Farmingdale, New York

DENNIS VERDEROSA

Age: 67

Residence: Coram, New York

EMIN L. COHEN, also known as “Ian Grant”

Age: 33

Residence: Coram, New York

ANTHONY VASSALLO

Age: 54

Residence: Farmingdale, New York

PAUL EWER

Age: 36

Residence: Massapequa, New York

MCARTHUR JEAN, also known as “John McArthur”

Age: 34

Residence: Dix Hills, New York

ROBERT GILBERT

Age: 51

Residence: Cold Spring Harbor, New York

SERGIO RAMIREZ

Age: 44

Residence: East Meadow, New York

E.D.N.Y. Docket No. 17-CR-372 (JS)

 



[1] The charges announced today are allegations, and the defendants are presumed innocent unless and until proven guilty.