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New York - 7 Arrested In “Pump And Dump” Penny Stocks Scheme

Published on: April 4, 2013 07:46 PM
By: USDOJ Press Release
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New York - Preet Bharara, the United States Attorney for the Southern District of New York, and George Venizelos, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of charges against ALEXANDER GOLDSHMIDT, ALEX PUZAITZER, MICHAEL VAX, PAUL ORENA, YITZ GROSSMAN, EFIM AKSANOV, and STEVE KOIFMAN for their roles in a conspiracy to commit securities fraud and the extortion of a co-conspirator whom they believed owed them money and stock related to the scheme.

Together, the defendants worked to fraudulently inflate the prices and trading volumes of publicly traded stock of small companies, also known as “penny stocks,” and then to sell shares of the stock at the fraudulently inflated prices to the investing public for a profit. GOLDSHMIDT, PUZAITZER, VAX, ORENA and GROSSMAN were arrested this morning in connection with today’s charges and were presented in Manhattan federal court before Magistrate Judge Kevin Nathaniel Fox this afternoon. EFIM AKSANOV and STEVE KOIFMAN were arrested in Florida and presented in federal court in the Southern District of Florida.

Manhattan U.S. Attorney Preet Bharara said: “As alleged, these defendants preyed on unsuspecting investors by manipulating the share price of a publicly traded stock in a classic ‘pump and dump’ scheme that they thought would reap big dividends. But when their pot of gold failed to materialize, they allegedly turned on a co-conspirator with threats and extortion, showing that their greed was strong enough to make them turn to violence.”

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FBI Assistant Director-in-Charge George Venizelos said: “Pump and dump schemes depend on unwitting investors who are deceived by grossly inflated claims about the stocks they are induced to buy. One group of victims in this case was those defrauded investors. But this was not white collar crime in the traditional sense. Another victim was the co-conspirator who, as alleged, was repeatedly threatened by the defendants with grievous harm to him and his family.”

The following allegations are based on the Complaint unsealed today in Manhattan federal court:

From 2012 through March 27, 2013, GOLDSHMIDT, PUZAITZER, VAX, ORENA, GROSSMAN, AKSANOV, and KOIFMAN conspired to commit securities fraud. As part of their “pump and dump” scheme, various defendants acquired control of a large block of shares of Face Up Entertainment Group, Inc. (“FUEG”), and then inflated the stock price and trading volume of FUEG before selling, or “dumping,” those shares at inflated prices to unsuspecting traders for a profit.

FUEG was a publicly traded company that was purportedly involved in the reality gaming social network market with its principal place of business located in Valley Stream, New York. As captured through judicially authorized wiretap interceptions, the defendants coordinated control over a significant portion of FUEG shares and then promoted the stock through the dissemination of false press releases sent over the Internet. In addition, the defendants coordinated trading of FUEG shares to create the impression of increased trading volume to make FUEG appear to be an attractive purchase for unsuspecting investors. However, the defendants were unable to reap a profit from trading FUEG stock timed to the promotions, and their scheme ultimately failed.

As a result of the failed promotion of FUEG stock, GOLDSHMIDT, PUZAITZER, VAX, ORENA, GROSSMAN, AKSANOV, and KOIFMAN conspired to extort one of their co-conspirators, referred to as “CC-1” in the Complaint. In the summer of 2012, AKSANOV, KOIFMAN, GOLDSHMIDT and PUZAITZER met with CC-1 in New York, New York, and demanded that CC-1 pay them $350,000 and return shares of FUEG, or AKSANOV would “put slugs into” CC-1’s chest.

In several subsequent telephone calls and meetings, various defendants continued to demand that CC-1 repay them for their stake in the failed FUEG scheme, or they would harm CC-1. During a meeting on or about March 5, 2013, GOLDSHMIDT, PUZAITZER, ORENA and VAX met with CC-1 at a hotel in New York City and further threatened CC-1 and CC-1’s family if CC-1 did not comply with their demands.

GOLDSHMIDT, PUZAITZER, VAX, ORENA, GROSSMAN, AKSANOV, and KOIFMAN are each charged with one count of conspiracy to commit securities fraud, which carries a maximum penalty of five years in prison, and one count of conspiracy to commit extortion, which carries a maximum penalty of 20 years in prison.

DEFENDANT RESIDENCE - AGE:
ALEXANDER GOLDSHMIDT Morganville, NJ 47
ALEX PUZAITZER Brooklyn, NY 52
MICHAEL VAX West Orange, NJ 54
PAUL ORENA Atlantic Beach, NY 38
YITZ GROSSMAN Valley Stream, NY 58
EFIM AKSANOV Sunny Isles, FL 39
STEVE KOIFMAN Boca Raton, FL 41


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1

 Apr 04, 2013 at 07:56 PM Normal Says:

Don't do the crime if you don't want to do the time.

2

 Apr 04, 2013 at 08:11 PM inNY Says:

Grossman served already Jail time a few years ago on security crime.. how did he end now doing the same thing?

3

 Apr 04, 2013 at 08:11 PM SandmanNY Says:

Oish - and another case where too many names are too obviously mi'shelanu. Hashem y'racheim.

4

 Apr 04, 2013 at 08:15 PM shredready Says:

Reply to #3  
SandmanNY Says:

Oish - and another case where too many names are too obviously mi'shelanu. Hashem y'racheim.

and it will continue until there is an outcry and condemnation against such actions and the people who do it.

5

 Apr 04, 2013 at 08:29 PM StealingDosentGetYouCloserToG-d Says:

Guys don't learn from them.
Stealing Doesn't Get You Closer To
G-d.

6

 Apr 04, 2013 at 08:31 PM shredready Says:

Reply to #2  
inNY Says:

Grossman served already Jail time a few years ago on security crime.. how did he end now doing the same thing?

good question if it is the same guy

It has been discovered that the mastermind behind many fraudulent transactions is none other than Yitz Grossman, an infamous shareholder of BioBalance LLC. Grossman already pleaded guilty to a 2003 indictment that accused him of conspiring to manipulate the price of New York Health Care, company that is somehow related to BioBalance through the stock scam Grossman put together.

7

 Apr 04, 2013 at 09:16 PM Anonymous Says:

These ppl are jews???

8

 Apr 04, 2013 at 09:28 PM TexasJew Says:

Put them all in jail and throw the key away. What a waste of humanity.

9

 Apr 04, 2013 at 09:41 PM Reb Yid Says:

Who's Orena, their shabbos goy?

10

 Apr 04, 2013 at 09:59 PM downtoearth Says:

Reply to #2  
inNY Says:

Grossman served already Jail time a few years ago on security crime.. how did he end now doing the same thing?

different grossman

11

 Apr 04, 2013 at 10:11 PM aleph Says:

Reply to #7  
Anonymous Says:

These ppl are jews???

Some of the names seem like Russian/Jewish.

The posters with "heimish guilt" are assuming they are all frum and think they give a hoot about an outcry from any or all of us, Rabbis or not... Ever heard of the Russian mob? Do you feel affiliation to them as well?
Yes, we should all conduct our business dealings ethically. No, we can't be held responsible when anybody with a remotely sounding Jewish name commits a crime.

12

 Apr 04, 2013 at 10:27 PM chillul hashem Says:

Reply to #10  
downtoearth Says:

different grossman

Same bad guy.

13

 Apr 04, 2013 at 10:44 PM ExpatriateOwl Says:

Shredready [#4] says:
"and it will continue until there is an outcry and condemnation against such actions and the people who do it."

The outcry and condemnation must be FROM THE RABBIS, who must take as much pains to ostracize and condemn the criminals as they do against the victims of sexual abuse.

14

 Apr 05, 2013 at 01:00 AM REALIST Says:

The Oisvorfer?!? Say it aint so, Yitz!

15

 Apr 05, 2013 at 06:56 AM The Oisvorfer Says:

Reply to #14  
REALIST Says:

The Oisvorfer?!? Say it aint so, Yitz!

It aint so.

16

 Apr 05, 2013 at 08:06 AM Anonymous Says:

Reply to #4  
shredready Says:

and it will continue until there is an outcry and condemnation against such actions and the people who do it.

Nothing will stop people when it comes to MONEY it Never did. It Never will. No matter what the consequences are. Famous Slogan: "Money Screams And People Listen!!"

17

 Apr 05, 2013 at 08:14 AM Anonymous Says:

Reply to #13  
ExpatriateOwl Says:

Shredready [#4] says:
"and it will continue until there is an outcry and condemnation against such actions and the people who do it."

The outcry and condemnation must be FROM THE RABBIS, who must take as much pains to ostracize and condemn the criminals as they do against the victims of sexual abuse.

I believe that crime stops within. You gotta wanna stop it by yourself. No-one can Stop you with anything if YOU don't wanna stop by your own.
And regarding sexual Abuse this is the proove to my word's Cuz as you see Nice Number of Convictions despite Rabbis pressures, it All depends within yourself only.

18

 Apr 05, 2013 at 08:21 AM Anonymous Says:

Reply to #13  
ExpatriateOwl Says:

Shredready [#4] says:
"and it will continue until there is an outcry and condemnation against such actions and the people who do it."

The outcry and condemnation must be FROM THE RABBIS, who must take as much pains to ostracize and condemn the criminals as they do against the victims of sexual abuse.

While I understand your hurt on the way rabbis handle for the victims. I don't think that its a Rabbis obligation to go out a Punishe people who do Aviros. Everybody has a Bechira to choose good from bad or the opposite there's concenquenses by G-d.

19

 Apr 05, 2013 at 09:20 AM Anonymous Says:

Maybe its time to look inward and realize there is are a disproportionate number of yidden involved in these felonies, scams and crimes. After the stories the past several years like this guy, the one in Florida, Madoff, Rubashkin, the Rabbonim who conspired with Dwek in New Jersey, the chassideshe rebbe with tax Evasion (I think the Spinka rebbe??), etc. etc. we should do some serious introspection and confront the issue.

20

 Apr 05, 2013 at 04:46 PM Liepa Says:

Reply to #19  
Anonymous Says:

Maybe its time to look inward and realize there is are a disproportionate number of yidden involved in these felonies, scams and crimes. After the stories the past several years like this guy, the one in Florida, Madoff, Rubashkin, the Rabbonim who conspired with Dwek in New Jersey, the chassideshe rebbe with tax Evasion (I think the Spinka rebbe??), etc. etc. we should do some serious introspection and confront the issue.

Rubashkin was a victim, fool!

21

 Apr 16, 2013 at 03:49 AM shameshameshame Says:

Reply to #10  
downtoearth Says:

different grossman

Same Yitz Grossman, master of scams and the #1 jewish (frum for the lack of a better word) scam artist! Same Grossman that just came out of 41 months of jail doing the SAME THING. Sad, that this jewish thug uses stolen money to give charity, sad that this Yitz Grossman, aka oisvorfer ruv buys 'respect' because of his 'wealth'. Stolen wealth. Sick that the shul and community, KNOWING that he's a scam artist, accept his charity. Sad that his children are victims.

22

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