Stock Scam Alert

South Florida scams busted: Ponzis, pump ‘n’ dumps, Forex

South Florida Business Journal by Paul Brinkmann, Reporter

Date: Monday, June 4, 2012, 5:11pm EDT


A concerted attack on investment fraud in South Florida over the past three years has netted 85 people busted and more than $1.5 billion in restitution ordered.

Federal and state authorities announced the results Monday, along with a list of 12 new cases that included Clean Coal Technologies.

Clean Coal’s president, Douglas Hague, 65, of Boca Raton, was charged Monday along with 15 other new defendants.

The charges allege that Hague paid kickbacks to a third party with the purpose of pumping up the stock price for Clean Coal Technologies (OTC: CCTC). The company purportedly converted low-grade coal to high-grade clean-burning coal. But the charges allege that Hague paid kickbacks to the manager of a pension fund to buy stock at inflated prices.

The federal district for South Florida ranks second in the nation in securities and investment fraud investigations and prosecutions.

According to the news release from the U.S. Attorney’s office, other new cases included:

Cleland Ayison, 32, of Tampa, arrested Monday on charges of possessing a fraudulent $500 million Federal Reserve Note.

Michael Cimino and Joseph Repko: Cimino, 59, of Philadelphia, Penn., the director and chairman of the board for Sure Trace Security Corporation (SSTY), and Repko, 63, of Hobe Sound, SSTY’s chief financial officer and president, were arrested Monday on charges of conspiring to commit mail fraud by paying kickbacks to a pension fund fiduciary for buying stock at inflated prices. SSTY, a Utah corporation, was purportedly involved in the anti-counterfeiting technology business.

Ryan Coblin, 41, of Boca Raton, president of Delivery Technology Solutions, a delivery company. Coblin was charged in September and pleaded guilty March 8 to engaging in a scheme to pay kickbacks to a hedge fund fiduciary in a stock scheme. Sentencing is scheduled for July 13.

Scott Haire, 42, of Coral Springs, was president of Wound Management Technologies, Inc. (WNDM), a Texas corporation that purportedly developed advanced wound care products. Haire was charged with engaging in a scheme to manipulate the publicly quoted share price and trading volume of WNDM common stock. Haire is expected to surrender on June 6.

According to the news release, authorities arrested several other people from other states who held meetings in South Florida to further their stock schemes.

Ponzi Schemes

Juan Carlos Rodriguez, 49, of Miami, indicted March 6 for alleged wire fraud in the execution of a Ponzi scheme. According to the indictment, Rodriguez was the sole officer and director of MDN Financial Group, a Miami company that solicited approximately $5.2 million from investors with promises that the company would invest in stocks, bonds, and precious metals. Rodriguez would recruit colleagues and friends to invest in MDN Financial, promising them 20 to 50 percent returns. He used more than $1 million of the money to pay for personal expenses like credit card bills.

George Elia, 68, formerly of Fort Lauderdale, scheduled to be arraigned June 6 on charges of operating a Ponzi scheme in which he recruited investors by making false claims about the potential returns on investments. Elia was the president of Fort Lauderdale-based International Consultants & Investment Group, LC. The Business Journal previously wrote about the alleged fraud.

Aner Menendez, arrested Monday on charges of mail fraud and wire fraud. As the sole member of Key Biscayne-based De Forcade LLC, he recruited investors claiming he was a skilled foreign currencies trader (foreign exchange or For-ex). He exploited social relationships to convince his victims to invest savings with him, but spent the money on himself and friends.

The SEC also said it filed nine separate civil injunctive actions against 12 individuals and eight microcap companies, charging them with violations of the antifraud provisions of the federal securities laws and seeking, among other relief, permanent injunctions, disgorgement and financial penalties.

Led by U.S. Attorney Wifredo Ferrer, the initiative includes the U.S. Securities and Exchange Commission and the state’s Office of Financial Regulation. Other cooperating agencies include the IRS, FDIC and FTC.

Ferrer said in a news release, “Too often, we hear from victims who have lost their entire lives’ savings or their retirement nest egg to one of these unscrupulous schemers. Today, we hope to educate the public about the need to be alert and to verify before trusting and investing. If something sounds too good to be true, it usually isn’t.”