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Lawyer Agrees to Plead Guilty in 'Pump and Dump' Case
The National Law Journal
November 05, 2009
Federal prosecutors filed a plea agreement Wednesday with a New York-based businessman and lawyer charged with lying to federal investigators about his knowledge of a fraudulent stock sale.
Robert Brown, a former partner at New York's Reitler Brown & Rosenblatt (now Reitler Kailas & Rosenblatt), agreed to plead guilty to obstruction of justice for hiding what he knew about a "pump and dump" scheme involving an unnamed investment firm in Newport Beach, Calif. According to documents filed at the U.S. District Court for the District of Columbia, Brown also helped an executive from the firm, as well as the chief executive officer and a member of the board of directors of a Chinese company, fraudulently transfer more than $25 million through a series of shell companies into accounts they controlled.
Under federal sentencing guidelines, Brown could face 10 to 16 months in prison and up to a $30,000 fine. He also agreed to forfeit $275,000 in proceeds from his alleged illegal activities.
The plea agreement also sheds some light on the companies that may be involved in the government's investigation. It says that none of Brown's testimony will be used to prosecute him in any case relating to the following companies: Xinhua Finance Limited; Biophan Technologies, Inc., currently known as Phantom Entertainment, Inc.; Infinium Labs, Inc.; IT&E International, Inc., now known as Averion International Corp.; Aztec Oil and Gas, Inc.; Small World Kids, Inc.; Visijet, Inc.; Perfisans Holdings, Inc.; and Xinhua Finance Media Limited.
First reported in The BLT: The Blog of Legal Times.
