Hillsboro man charged in federal case in connection with alleged securities kickback scheme
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WASHINGTON D.C. - A Hillsboro man has been charged in a federal case stemming from an undercover FBI investigation into allegations of secret kickback-for-investment schemes.
Steve Berman, 49, of Hillsboro, Ohio, the CEO of China Wi-Max Communications, was charged with mail and wire fraud.
Berman, of Main Street in Hillsboro, was one of 13 individuals charged in the case.
The Securities and Exchange Commission, U.S. Attorney for the District of Massachusetts, and Federal Bureau of Investigation announced Thursday that parallel cases were filed in federal court against several corporate officers, lawyers and a stock promoter alleging they used kickbacks and other schemes to trigger investments in various thinly-traded stocks, according to a release from the SEC.
Berman told The Highland County Press on Thursday that he was in Boston for the court hearing. He is being represented by Martin Murphy of Foley Hoag LLP in Boston.
"I'm certainly going to vigorously defend myself in this matter. I am not guilty," Berman said.
If convicted, the defendants charged with mail fraud and wire fraud each face up to 20 years in prison, to be followed by three years of supervised release and a $250,000 fine on each count. If convicted on the conspiracy to commit securities fraud charges, the defendants each face up to five years in prison, to be followed by three years of supervised release and a $250,000 fine on each count.
In October 2009, Berman submitted a press release to the Highland County Press on China Wi-Max Communication.
According to the release, the company is a "world-class telecommunications and IP transportation company with operations in mainland China."
In October Berman announced that the company was announcing the launch of "its aggressive program to build revenues via the connection of a growing number of business customers to its wireless broadband network in Beijing. The execution of the company's business strategy will be under the direction of (Berman) who was appointed president and chief executive officer of China Wi-Max Communications
China Wi-Max Communications is headquartered in Denver, Colo.
"Berman, of Hillsboro, is a seasoned executive with 20 years of business and legal experience in telecommunications and other industries. He has served as corporate general counsel, operations manager, regulatory and compliance strategist, and contract negotiator at a number of telecommunications, financial and manufacturing companies," according to the release.
Berman is an attorney and member of the American Bar Association.
According to the SEC, these latest charges follow a series of similar cases filed by the SEC in October 2010 and June 2011 in which more than a dozen companies and penny stock promoters were charged in similar kickback-for-investment schemes.
“The public has a right to invest in an honest and fair market. Companies that agree to pay illegal kickbacks harm investors and undermine fair competition in the markets,” said United States Attorney Carmen Ortiz. “Hard working Americans who invest their savings should not be subjected to backroom deals like those alleged today.”
“We are committed to working with our law enforcement partners here in Massachusetts and around the country to stop abuses in the microcap sector and hold the perpetrators responsible,” said David Bergers, Director of the SEC’s Boston Regional Office. “Kickbacks and phony consulting agreements have no place in the financial strategies of any public company, and executives who engage in this kind of fraud are just selling out their own investors.”
“Boston FBI agents initiated an undercover operation aimed at identifying corporate insiders engaged in illegal investment schemes. No one who is engaged in illegal activity while participating in the markets, including CEOs, traders, fund managers, equities analysts, lawyers and publicists, is exempt from the FBI's scrutiny," said Richard DesLauriers, Special Agent in Charge of the FBI in Boston. "Because the nation's economic security is intertwined with our overall national security, the Boston division of the FBI places a substantial emphasis on investigating white collar crimes. During these difficult economic times, now, more than ever, the well-being of the global economy rests on the diligent enforcement of laws designed to ensure the fair and orderly operation of the capital markets. The FBI will continue to use undercover operations and other sophisticated investigative tools at its disposal to protect the integrity and transparency of financial markets.”
The following individuals were charged today:
• Kelly Black-White, 51, of Mesa, Ariz. (Operator of Premier Funding, Inc. and Premiere Services, Inc.), charged with wire fraud.
• James Prange, 60, of Greenbush, Wis. (Northern Equity, Inc.), charged with wire fraud.
• Michael Lee, 51, of Hingham, Mass. (CEO of ZipGlobal), charged with mail fraud and conspiracy to commit securities fraud.
• Edward Henderson, 69, of Lincoln, R.I., charged with wire fraud.
• Paul DesJourdy, 50, of Medfield, Mass. (CEO of Symbollon Pharmaceuticals), charged with mail fraud and conspiracy to commit securities fraud.
• James Wheeler, 51, of Camas, Wash. (CEO MicroHoldings, Inc.), charged with mail fraud and conspiracy to commit securities fraud.
• Steve Berman, 49, of Hillsboro, Ohio (CEO of China Wi-Max Communications), charged with mail and wire fraud.
• Richard Kranitz, 68, of Grafton, Wis. (Board Member of China Wi-Max Communications), charged with mail and wire fraud.
• JC Jordan, 60, of Cameron Park, Calif. (CEO of Vida Life International, LTD), charged with mail and wire fraud.
• Karen Person, 61, of Naperville, Ill. (President of Small Business Company, Inc.), charged with mail and wire fraud.
• Albert Reda, 65, of Tustin, Calif. (Treasurer of 1st Global Financial), charged with mail and wire fraud.
• Steve Stuart, 48, of Monrovia, Md. (Major Shareholder in ComCam International, Inc.), charged with mail and wire fraud.
• Muhammad (“M.J.”) Shaheed, 44, of Houston, Texas (CEO of Augrid Global Holdings Corporation), charged with mail and wire fraud.
•
Today, the SEC also filed civil charges of securities fraud against Desjourdy, Henderson, Lee and Wheeler alleging they defrauded investors through the use of kickbacks in financing transactions.
U.S. Attorney Ortiz; SAC DesLauriers; and Director Bergers made the announcement today. The criminal case is being prosecuted by Assistant U.S. Attorneys Vassili Thomadakis and Sarah E. Walters of Ortiz’s Economic Crimes Unit. The SEC’s case was investigated by Michelle Giard Draeger, Ellen Moynihan, and Marty Healey of the Boston Regional Office.
WASHINGTON D.C. - A Hillsboro man has been charged in a federal case stemming from an undercover FBI investigation into allegations of secret kickback-for-investment schemes.
Steve Berman, 49, of Hillsboro, Ohio, the CEO of China Wi-Max Communications, was charged with mail and wire fraud.
Berman, of Main Street in Hillsboro, was one of 13 individuals charged in the case.
The Securities and Exchange Commission, U.S. Attorney for the District of Massachusetts and Federal Bureau of Investigation announced Thursday that parallel cases were filed in federal court against several corporate officers, lawyers and a stock promoter alleging they used kickbacks and other schemes to trigger investments in various thinly-traded stocks, according to a release from the SEC.
Berman told The Highland County Press on Thursday that he was in Boston for the court hearing. He is being represented by Martin Murphy of Foley Hoag LLP in Boston.
"I'm certainly going to vigorously defend myself in this matter. I am not guilty," Berman said.
If convicted, the defendants charged with mail fraud and wire fraud each face up to 20 years in prison, to be followed by three years of supervised release and a $250,000 fine on each count. If convicted on the conspiracy to commit securities fraud charges, the defendants each face up to five years in prison, to be followed by three years of supervised release and a $250,000 fine on each count.
In October 2009, Berman submitted a press release to the Highland County Press on China Wi-Max Communication.
According to the release, the company is a "world-class telecommunications and IP transportation company with operations in mainland China."
In October, Berman announced that the company was announcing the launch of "its aggressive program to build revenues via the connection of a growing number of business customers to its wireless broadband network in Beijing. The execution of the company's business strategy will be under the direction of (Berman) who was appointed president and chief executive officer of China Wi-Max Communications."
China Wi-Max Communications is headquartered in Denver, Colo.
"Berman, of Hillsboro, is a seasoned executive with 20 years of business and legal experience in telecommunications and other industries. He has served as corporate general counsel, operations manager, regulatory and compliance strategist, and contract negotiator at a number of telecommunications, financial and manufacturing companies," according to the release.
Berman is an attorney and member of the American Bar Association.
According to the SEC, these latest charges follow a series of similar cases filed by the SEC in October 2010 and June 2011 in which more than a dozen companies and penny stock promoters were charged in similar kickback-for-investment schemes.
“The public has a right to invest in an honest and fair market. Companies that agree to pay illegal kickbacks harm investors and undermine fair competition in the markets,” said United States Attorney Carmen Ortiz. “Hardworking Americans who invest their savings should not be subjected to backroom deals like those alleged today.”
“We are committed to working with our law enforcement partners here in Massachusetts and around the country to stop abuses in the microcap sector and hold the perpetrators responsible,” said David Bergers, Director of the SEC’s Boston Regional Office. “Kickbacks and phony consulting agreements have no place in the financial strategies of any public company, and executives who engage in this kind of fraud are just selling out their own investors.”
“Boston FBI agents initiated an undercover operation aimed at identifying corporate insiders engaged in illegal investment schemes. No one who is engaged in illegal activity while participating in the markets, including CEOs, traders, fund managers, equities analysts, lawyers and publicists, is exempt from the FBI's scrutiny," said Richard DesLauriers, Special Agent in Charge of the FBI in Boston. "Because the nation's economic security is intertwined with our overall national security, the Boston division of the FBI places a substantial emphasis on investigating white collar crimes. During these difficult economic times, now, more than ever, the well-being of the global economy rests on the diligent enforcement of laws designed to ensure the fair and orderly operation of the capital markets. The FBI will continue to use undercover operations and other sophisticated investigative tools at its disposal to protect the integrity and transparency of financial markets.”
The following individuals were charged today:
• Kelly Black-White, 51, of Mesa, Ariz. (Operator of Premier Funding, Inc. and Premiere Services, Inc.), charged with wire fraud.
• James Prange, 60, of Greenbush, Wis. (Northern Equity, Inc.), charged with wire fraud.
• Michael Lee, 51, of Hingham, Mass. (CEO of ZipGlobal), charged with mail fraud and conspiracy to commit securities fraud.
• Edward Henderson, 69, of Lincoln, R.I., charged with wire fraud.
• Paul DesJourdy, 50, of Medfield, Mass. (CEO of Symbollon Pharmaceuticals), charged with mail fraud and conspiracy to commit securities fraud.
• James Wheeler, 51, of Camas, Wash. (CEO MicroHoldings, Inc.), charged with mail fraud and conspiracy to commit securities fraud.
• Steve Berman, 49, of Hillsboro, Ohio (CEO of China Wi-Max Communications), charged with mail and wire fraud.
• Richard Kranitz, 68, of Grafton, Wis. (Board Member of China Wi-Max Communications), charged with mail and wire fraud.
• JC Jordan, 60, of Cameron Park, Calif. (CEO of Vida Life International, LTD), charged with mail and wire fraud.
• Karen Person, 61, of Naperville, Ill. (President of Small Business Company, Inc.), charged with mail and wire fraud.
• Albert Reda, 65, of Tustin, Calif. (Treasurer of 1st Global Financial), charged with mail and wire fraud.
• Steve Stuart, 48, of Monrovia, Md. (Major Shareholder in ComCam International, Inc.), charged with mail and wire fraud.
• Muhammad (“M.J.”) Shaheed, 44, of Houston, Texas (CEO of Augrid Global Holdings Corporation), charged with mail and wire fraud.
Today, the SEC also filed civil charges of securities fraud against Desjourdy, Henderson, Lee and Wheeler alleging they defrauded investors through the use of kickbacks in financing transactions. U.S. Attorney Ortiz; SAC DesLauriers; and Director Bergers made the announcement today. The criminal case is being prosecuted by Assistant U.S. Attorneys Vassili Thomadakis and Sarah E. Walters of Ortiz’s Economic Crimes Unit. The SEC’s case was investigated by Michelle Giard Draeger, Ellen Moynihan, and Marty Healey of the Boston Regional Office.
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