WASHINGTON – The principal of a Costa Rican brokerage firm and a Las Vegas stock promoter were each convicted yesterday in the Southern District of Florida of all charges for their roles in a stock manipulation scheme that defrauded investors, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Chief Postal Inspector Guy Cottrell of the U.S. Postal Inspection Service (USPIS) and James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office.

Jonathan Curshen, 47, the principal of Red Sea Management and Sentry Global Securities, two companies located in San Jose, Costa Rica, that provided offshore accounts and facilitated trading in penny stocks, was found guilty of conspiracy to commit securities fraud, wire fraud and mail fraud; two counts of mail fraud; and conspiracy to commit international money laundering. Nathan Montgomery, 30, a Las Vegas stock promoter, was found guilty of conspiring to commit securities fraud and wire fraud.

The evidence at trial showed that in January and February 2007, Curshen, of Costa Rica and Sarasota, Fla., and Montgomery, of Las Vegas, were involved in a scheme to illegally manipulate the stock price of a company called CO2 Tech (ticker CTTD), which traded on the Pink Sheets, an inter-dealer electronic quotation and trading system.

Evidence at trial showed that Curshen’s and Montgomery’s co-conspirators controlled the outstanding shares of CO2 Tech, which were used in the stock manipulation scheme. Montgomery and his conspirators engaged in coordinated trades in conjunction with the issuance of false and misleading press releases that were designed to artificially inflate the price of CO2 Tech shares to make it appear that it had significant business prospects. According to these press releases, CO2 Tech purported to have a business relationship with Boeing to reduce polluting gases emitted from airplanes, when in fact CO2 Tech never had any business or relationship with Boeing.

According to the evidence at trial, Montgomery and his co-conspirators, Robert Weidenbaum, Timothy Barham Jr., Ryan Reynolds and others fraudulently “pumped” the market price and demand for CO2 Tech stock through these press releases and coordinated trades of shares of CO2 Tech stock in order to create the appearance of legitimate buying interest by legitimate investors. The evidence showed that as Montgomery and his conspirators pumped the price of the stock, Curshen and his conspirators facilitated the “dumping” of shares through the trading desk at Red Sea and Sentry Global Securities by selling the shares at the direction of their conspirators to the general investing public. The evidence showed that these shares, which became virtually worthless, were purchased by unsuspecting investors, including investors in the Southern District of Florida. The evidence showed that Montgomery, Weidenbaum, Reynolds and Barham were paid approximately $1 million in cash by their conspirators to participate in sham stock trades of CO2 Tech. The cash was delivered to Miami via a private jet from an airport outside New York.

The evidence further showed that, from approximately 2003 through 2008, Curshen operated Red Sea as a money laundering hub in Costa Rica that established bank accounts and brokerage accounts in the United States and Canada under false pretenses and through nominee owners. The evidence further showed that Curshen and his co-conspirators laundered the proceeds of the stock fraud from accounts in the United States to an account in Canada, all in an effort to conceal and disguise the nature and source of the proceeds.

At sentencing, Curshen faces a sentence of up to five years in prison on the conspiracy to defraud count, and up to 20 years on each count of mail fraud and money laundering conspiracy. Montgomery faces a sentence of up to five years for the conspiracy to defraud count. The defendants are scheduled to be sentenced by Judge Richard W. Goldberg on May 11, 2012.

Stock promoters Weidenbaum, Barham and Reynolds, who were also charged in this case, previously pleaded guilty to conspiring to commit securities fraud, wire fraud and mail fraud. They also will be sentenced by Judge Goldberg on May 9, 2012. Michael Simon Krome, a securities attorney from New York, who participated in the conspiracy and evaded federal securities registration requirements in order to provide co-conspirators with millions of unregistered and “free trading” shares of CO2 Tech that were used to execute the stock manipulation, also pleaded guilty to conspiring to commit securities fraud, mail fraud and wire fraud.

The case was investigated by the FBI’s Washington Field Office and the USPIS. The case is being prosecuted by Trial Attorneys N. Nathan Dimock and Rina Tucker Harris of the Fraud Section in the Justice Department’s Criminal Division. The U.S. Attorney’s Office for the Southern District of Florida provided significant assistance in this case. The Department of Justice acknowledges the significant assistance of the Financial Industry Regulatory Authority (FINRA) and the U.S. Securities and Exchange Commission (SEC) in its investigation. The SEC has a pending parallel civil case. The Criminal Division’s Office of International Affairs and Costa Rican authorities also provided assistance.

This prosecution is part of efforts under way by the Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

(AFP) – 2 hours ago

Jury selection began Monday in the trial of the fallen financier and cricket mogul Allen Stanford, pictured in 2009 (AFP/Getty Images/File, Dave Einsel)

HOUSTON, Texas — Jury selection began Monday in the trial of the fallen financier and cricket mogul Allen Stanford, accused of running a $7 billion Ponzi scheme, according to an attorney for the firm representing him.
The Houston Chronicle reported that 80 potential jurors were interviewed Monday, and that the selection would continue on Tuesday.
Stanford, 61, has spent three years since his arrest in a federal prison in Houston, and the mustachioed ex-tycoon may give evidence in a case watched closely by myriad investors who still don’t know if they will get any of their money back.
Stanford has pleaded not guilty to a revised 14-count federal indictment accusing him of bilking approximately 30,000 investors from over 100 countries through bogus investments with Stanford International Bank, based in Antigua.
As a dual citizen of the United States and the Caribbean country of Antigua and Barbuda, Stanford was known for conspicuous largesse, especially on the two islands, where he was knighted.
In the West Indies he created the Stanford 20/20 Cricket tournament which, in 2008, captured a global television audience of 300 million.
But his personal fiefdom began to crumble when it attracted scrutiny from US financial regulators and he was charged by the US Securities and Exchange Commission (SEC) with fraud in February 2009.

According to the indictment, Stanford “perpetrated a scheme to defraud investors who purchased SIB (certificates of deposit) of billions of dollars by soliciting funds under false pretenses.”
He then failed to invest those funds as promised, misappropriated money for personal use, created and disseminated false and fraudulent accounts to falsely show investors how their funds had been invested, and funneled bribes to Antiguan regulators to conceal the scheme, said prosecutors.

Stanford was arrested in June 2009 outside his girlfriend’s home in the US state of Virginia.
In 2006, Forbes Magazine ranked Stanford as the 605th richest person in the world, with a fortune of $2.2 billion. After most of those funds were frozen by the courts, Stanford was forced to accept appointed counsel.
Copyright © 2012 AFP. All rights reserved.

United States v. Robert Allen Stanford et al.
Court Docket Number: H-09-342

This case is assigned to Judge David Hittner, United States District Court for the Southern District of Texas, Courtroom 8A, 8th Floor, United States Courthouse, 515 Rusk Avenue, Houston, Texas. On June 16, 2010, Judge Hittner issued an order approving certain alternative notice procedures to be followed by the Government in alerting victims to future court proceedings relating to this case, as required by the Justice For All Act of 2004. The full text of the Court’s Order is below:

Background: On June 19, 2009, the U.S. District Court for the Southern District of Texas unsealed a 21-count indictment returned by a federal grand jury on June 18, 2009, against defendants Robert Allen Stanford, Laura Pendergest-Holt, Gilberto Lopez, Mark Kuhrt, and Leroy King, charging each with one count of conspiracy to commit mail, wire and securities fraud (Count 1: 18 U.S.C. § 371); seven counts of wire fraud (Count 2: 18 U.S.C. § 1343); ten counts of mail fraud (Counts 9-18: 18 U.S.C.§ 1341), and one count of conspiracy to commit money laundering (Count 21: 18 U.S.C. §1956(h)) stemming from a $7 billion investment fraud scheme. The indictment also charges Stanford, Pendergest-Holt and King with one count of conspiracy to obstruct a Securities and Exchange Commission investigation (Count 19: 18 U.S.C. §371) and one count of obstruction of an SEC investigation (Count 20: 18 U.S.C.§1505).
According to the indictment, which also seeks forfeiture from all the defendants (18 U.S.C. §§981(a)(1)(c) and 982(a)(1)), Stanford and his co-defendants engaged in a scheme to defraud investors who purchased approximately $7 billion in certificates of deposit administered by Stanford International Bank Ltd. (SIBL), an offshore bank controlled by Stanford and located on the island of Antigua. Stanford and his co-defendants allegedly misused and misappropriated most of those investor assets, including diverting more than $1.6 billion into undisclosed personal loans to Stanford himself, while misrepresenting to investors SIBL’s financial condition, its investment strategy and the extent of its regulatory oversight by Antiguan authorities. The indictment alleges the following:

That the defendants allegedly falsely claimed that SIBL’s assets grew from approximately $1.2 billion in 2001 to approx. $8.5 billion in December 2008. The indictment alleges that, in fact, approx. $5 billion of SIBL’s reported assets consisted of notes on loans to Stanford and grossly overstated interests in “island properties,” including more than $2 billion added to the books in 2008 from an allegedly artificial real estate deal that Stanford and his co-conspirators conceived to inflate the bank’s reported assets;

That Stanford and his co-defendants allegedly falsely represented to investors that SIBL’s investment strategy was to “minimize risk and achieve liquidity” and promised rates of return on CDs that in the end were sim0ly too good to be true in light of the bank’s actual investments and assets; and

That Stanford and his co-defendants allegedly made false and misleading representations about the regulatory scrutiny of the bank by Antiguan authorities, when, in fact, Stanford was making corrupt payments of more than $100,000 to King to ensure that the Antiguan bank regulatory authority that he headed did not accurately audit, or verify the assets reported in the bank’s financial statements.

Also according to the indictment, Stanford, Pendergest-Holt and King conspired to conceal the fraud from the U.S. Securities and Exchange Commission (SEC) in order to fend off an SEC investigation. King allegedly provided Stanford and others with confidential information that he had received from an official SEC inquiry into a possible fraud on investors by SIBL so that additional false representations concerning SIBL’s financial health and Antiguan regulatory oversight could be made. In addition, Stanford, Pendergest-Holt and others allegedly agreed that Pendergest-Holt would provide false information to the SEC about the true value of SIBL’s investment portfolio. See copy of Indictment below.

Filing of a Superseding Indictment against Stanford: On May 4, 2011, a grand jury returned the superseding indictment attached below against Robert Allen Stanford. The superseding indictment adds to the notice of forfeiture additional bank accounts that have been uncovered in the criminal investigation. Adding these accounts to the forfeiture notice allows the United States to seek an order forfeiting these accounts (and repatriating the foreign funds to the United States) upon a conviction in Stanford’s case. Any such forfeited funds would then be applied to a restitution order in favor of Stanford victims. In addition, since the district court severed Stanford’s case from that of his codefendants, the superseding indictment focuses on Stanford’s conduct that will be the focus of his trial.

September 12, 2011 trial date for Stanford has been reset: Stanford’s trial, which is severed and separated out from the trial of the other defendants, will commence January 23, 2012. A copy of the June 21, 2011 Order withdrawing the September 2011 Trial Setting is below. The other defendants are set to be tried following Stanford’s trial.
A gag order is currently in effect: Previously, on September 30, 2010, the court issued an order barring anyone, including the alleged victims and all other potential witnesses expected to be called by either side, from giving a statement related to the trial, the parties, the witnesses or the issues in the case to “any public communications media” due to the court’s concern that the jury pool in the upcoming trials might be tainted because of such publicity. A copy of the order is below.
Related cases: : In a related case before Judge Hittner, United States v. James M. Davis (Court Docket H 09- 335), James Davis pleaded guilty on April 27, 2009, to a three count information charging him with conspiracy to commit mail, wire, and securities fraud; mail fraud; and conspiracy to obstruct an SEC investigation. Davis is cooperating with the government’s ongoing investigation and has agreed to the entry of a preliminary order of forfeiture of fraud proceeds in the amount of $1 billion. No date has been set for Davis’ sentencing. In another related case, United States v. Perraud and Thomas Raffanello (Court Docket H 09- 601029-CR-Zloch), on February 12, 2010, in the Southern District of Florida, while the jury was deliberating, U.S. District Court Judge Richard W. Goldberg acquitted Bruce Perraud, a former global security specialist at the Ft. Lauderdale, Florida, office of Stanford Financial Group (SFG), headquartered in Houston, Texas, and Thomas Raffanello, the former global director of security at SFG ‘ s Ft. Lauderdale office, granting the defendants’ motions for judgment of acquittal pursuant to Rule 29. Perraud and Raffanello each were charged with one count of conspiracy to obstruct a Securities and Exchange Commission (SEC) proceeding and to destroy documents in a federal investigation, one count of obstruction of a proceeding before the SEC, and one count of destruction of records in a federal investigation in a September 2009 superseding indictment stemming from a $7 billion investment fraud scheme.

Status of Leroy King: Defendant King remains under house arrest in Antigua as the Caribbean island processes a request for his extradition to the United States.

Source: USDOJ

Stanford, 61, has spent much of that time in a federal prison in Houston, and the mustachioed ex-tycoon may give evidence in a case watched closely by myriad investors who still don’t know if they will get any of their money back.

The trial has been delayed due to legal maneuvers, attorneys being hired and fired, and a prison fight that left Stanford, a towering man of six feet and four inches (193 centimeters), badly injured.

Stanford has pleaded not guilty to a revised 14-count federal indictment accusing him of bilking approximately 30,000 investors from over 100 countries through bogus investments with Stanford International Bank, based in Antigua.

Fallen Financier & Cricket Mogul Allen Stanford

In the West Indies he created the Stanford 20/20 Cricket tournament which, in 2008, captured a global television audience of 300 million.

But his personal fiefdom began to crumble when it attracted scrutiny from US financial regulators and he was charged by the US Securities and Exchange Commission (SEC) with fraud in February 2009.

According to the indictment Stanford “perpetrated a scheme to defraud investors who purchased SIB (certificates of deposit) of billions of dollars by soliciting funds under false pretenses.”

He then failed to invest those funds as promised, misappropriated money for personal use, created and disseminated false and fraudulent accounts to falsely show investors how their funds had been invested, and funneled bribes to Antiguan regulators to conceal the scheme, said prosecutors.

Following weeks of speculation about the federal investigation into his dealings, Stanford was arrested in June 2009 outside his girlfriend’s home in the US state of Virginia.

In 2006, Forbes Magazine ranked Stanford as the 605th richest person in the world, with a fortune of $2.2 billion. After most of those funds were frozen by the courts, Stanford was forced to accept appointed counsel.

But he has gone through more than a dozen lawyers since. Some he fired, but others quit. As recently as last week, Stanford’s court-appointed attorneys, Robert Scardino and Ali Fazel, asked US District Judge David Hittner permission to withdraw from the case, but the request was denied.

Judge Hittner had also ruled that Stanford was a flight risk and refused to set a bail bond, leaving him in custody.

While behind bars Stanford was involved in a fight with another inmate in which he was smashed into a steel pole, breaking many facial bones, and thrown onto a concrete floor injuring the back of his head.

He suffered a concussion which his attorneys claimed left him with memory loss and unable to participate in his defense.

Following the altercation, prison medics also prescribed antidepressants and strong antianxiety medication for Stanford. The combination, his attorneys argued, left him unfit for trial.

But the judge disagreed, ordering Stanford, who had become addicted to the anxiety medication, to undertake drug treatment and last month the accused was declared competent to stand trial.

Defense attorneys reportedly plan to have Stanford take the stand, but a fraud detection expert said the tactic could backfire.

“The prosecution gets to put their case on first. And when push comes to shove and all the evidence is on the table, the defense often changes its mind,” said Allen Bachman, of the Association of Certified Fraud Examiners in Austin, Texas.

A key test for prosecutors will be keeping the complex case against Stanford understandable to the jury.

“They need to keep it simple and concentrate on their best evidence,” Bachman said. “They don’t want to go down the worm hole.”

Source: MSN

LIMA, Peru (AP) — Joran van der Sloot knew his guilty plea in the strangulation death of a young woman he met at a Lima casino was a big gamble as he tried to get a reduced sentence. On Friday, the poker-loving Dutchman lost.

A three-judge panel sentenced him to 28 years in prison, discarding his claims of contrition in a killing his lawyer said was triggered by trauma from being the prime suspect in the unsolved 2005 disappearance of U.S. teen Natalee Holloway.

Joran van der Sloot arrives to the courtroom for his sentence at San Pedro prison in Lima, Peru, Friday Jan. 13, 2012. Van der Sloot will be sentenced Friday for the 2010 murder of Stephany Flores, a young woman he met at a Lima casino. Prosecutors have asked for a 30-year sentence for first-degree murder and theft. (AP Photo/Karel Navarro)

Asked if he accepted the sentence, Van der Sloot, standing in a green T-shirt and faded jeans in a hot Lima courtroom, said he would appeal.
The sentencing marked the latest chapter in the tabloid-sustaining saga and came a day after a judge in Alabama declared Holloway legally dead as her parents try to bring Van der Sloot, 24, to the U.S. for a related crime.
“I believe he is beyond rehabilitation,” Dave Holloway in Birmingham, Ala., after that hearing.
The Peruvian judges said Friday that due to time already served, van der Sloot’s sentence would end in June 2038.

While the parents of Holloway and Flores want him to experience the greater deprivation of a U.S. prison, they will have to wait for him to serve his time before any extradition on U.S. charges related to his alleged extortion of Holloway’s mother, a Peruvian legal expert said.
Late Friday, prison authorities told the AP that Van der Sloot had been transferred to the high-security Piedras Gordas prison in northern Lima in response to reports that he had enjoyed privileges like television, internet access and a cell phone in Castro Castro prison. Piedras Gordas holds local crime bosses and terrorism convicts, including Shining Path guerrillas.

“He will be in an individual cell at Piedras Gordas to give authorities greater control of him and cut off some of the facilities he has had in Castro Castro,” said prison service spokeswoman Janeth Sanchez.
Earlier Friday, the three female judges showed no sign of believing his contrition for the May 2010 killing of Stephany Flores. Their sentence, which took a clerk nearly two hours to read as Van der Sloot repeatedly wiped sweat from his brow, said he was guilty of “first-degree murder with aggravating factors of ferocity and great cruelty.”

Van der Sloot stood passively as the clerk detailed how he elbowed Flores, a 21-year-old business student, in the face, beat her repeatedly, then strangled her with his bloodied shirt.
Van der Sloot’s expression didn’t change when the sentence was rendered, including the judges’ order to pay $75,000 in reparations to the victim’s family. No members of Van der Sloot’s family attended the trial.

It is the first sentence ever imposed on Van der Sloot despite repeated efforts to prove he was involved in Holloway’s apparent death on the Dutch Caribbean island of Aruba where he grew up. She was last seen leaving a nightclub with him.

The Peruvian victim’s father, Ricardo Flores, complained after the sentencing that Van der Sloot was living well in a Lima prison, where he has been segregated from the general population.
“A jail isn’t a five-star hotel,” Ricardo Flores told reporters. “Since the first day, we’ve been complaining about the excessive privileges” Van der Sloot allegedly enjoyed in jail.
Unconfirmed news reports, denied by penal authorities, say Van der Sloot has had a cell phone, television, a video gaming console and Internet access in his cell. A Peruvian TV station published a photo Friday it says was taken by Van der Sloot himself of his prison cell that shows a 42-inch LCD television, a Blu-ray player and an Internet modem.
Flores said that “everything they showed on the TV has been proven” but that he would not have documentation of it to present to the news media until Monday.
Van der Sloot’s attorney, Jose Jimenez, said he is not familiar with his client’s prison cell.
As in many developing nations, foreigners with money can buy superior treatment in Peru’s prisons, including decent food, while the vast majority of inmates suffer overcrowding and constant peril from criminal gangs.
Under Peru’s penal system, Van der Sloot could become eligible for parole after serving half the sentence with good behavior, including work and study. The judges specified that Van der Sloot, as a foreigner, be expelled from Peru after serving his sentence.
Peruvian criminal law expert Luis Lamas said Peru’s legal code specifies that Van der Sloot serve his time before he can be extradited.
But Ken Randall, dean of University of Alabama law school, said he believes Peru’s extradition treaty with the United States would allow for Van der Sloot to be extradited to the U.S. to stand trial on the extortion and fraud charges before his sentence ends.
“In this extraordinary case of Natalee Holloway, Peru would be well advised to do so,” he said.
There is no indication U.S. officials have moved to seek to extradite Van der Sloot.
Van der Sloot was indicted on those charges in Alabama the same day he was arrested for the Flores murder. He is accused of accepting $25,000 in return for a promise to lead a lawyer for Holloway’s mother to her daughter’s remains.
Van der Sloot didn’t deliver on the offer, and U.S. authorities say he may have used some of the money to fly to Peru two weeks before the Flores murder. After killing the Lima woman, he took nearly $300 in cash from Flores as well as credit cards, and was captured four days later in Chile.
Van der Sloot told police he flew into a rage when she discovered his connection to Holloway while they were playing online poker in his hotel room. He had received an instant message from someone about the case.
Police forensic experts disputed that story, and the judges who sentenced him noted that Van der Sloot later recanted the confession, claiming it was exacted under duress and without an official translator. The victim’s family contends Van der Sloot killed Flores so he could rob her.
The imposing young man raised on a tourist island has been a staple of tabloids and true crime TV, as well as the subject of several books about Holloway.
The 18-year-old from a wealthy Birmingham suburb disappeared on May 30, 2005, during a high school graduation trip. Her body was never found and repeated searches turned up nothing even as the case garnered worldwide attention.

Van der Sloot said he was involved in her disappearance in a videotape clandestinely made by a Dutch journalist. He later denied it, however, and has told several interviewers that he is a pathological liar. A homicide investigation into her death remains open in Aruba though there has been no recent activity, officials said.
Associated Press Writers Martin Villena, Carla Salazar and Franklin Briceno contributed to this report.