Man charged in securities scams connected to Florida shell business

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Man charged in securities fraud tied to Florida shell company

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The seal of the U.S. Securities and Exchange Commission holds on the wall at SEC head office in Washington.

Jonathan Ernst | Reuters

A Minnesota guy criminally charged this month with securities scams in a plan to pirate inactive shell business likewise might have just recently taken control of a Florida penny-stock business, or a minimum of attempted to, court filings recommend.

Federal district attorneys and the Securities and Exchange Commission in different criminal and civil actions submitted in Minnesota federal court this month implicate Mark Miller of utilizing phony files to take control of non-active shell business and wrongly inflate their stock rates, prior to offering countless shares for earnings.

Miller, a 43-year-old basic specialist, is a local of Breezy Point, Minnesota, where he had actually been a Republican member of city board till resigning days after his indictment.

According to district attorneys, Miller, his criminal case co-defendant Saied Jaberian and an unknown relative of Miller really ended up being the small CEOs and presidents of the business targeted in the supposed fraud.

Civil court files submitted in Florida beginning in February reveal a Minnesota guy with the exact same name, Mark Miller, taken part in efforts to take control of another inactive shell business, New World Gold Corp.

New World Gold, which professes to be in business of mining gold ore, is not one of 7 business determined as targets of Miller’s supposed plan in the federal criminal case or in the civil SEC case, which are pending in Minnesota federal court.

But Florida court filings, news release and social networks activity surrounding New World Gold mirror accusations versus Miller and his 2 co-defendants in the “pump and dump” plan explained in Minnesota court by federal district attorneys and securities regulators.

New World Gold’s shares have actually increased in both cost and trading volume in the previous a number of months, since a male called Mark Miller submitted the actions in Florida court looking for to manage the business.

A day after CNBC broke the news of the criminal indictment versus Miller on June 18, New World Gold provided a declaration on Twitter declaring that “Mark Miller” is not associated with the business.

New World Gold did not state that the “Mark Miller” who was linked to that business in court filings is a various Mark Miller from the one who was arraigned in Minnesota.

A variety of individuals who follow the business on stock conversation boards explained that the business likewise did not discuss why it would disclaim a connection to Mark Miller if that individual was not the private criminally charged in Minnesota.

Robert Lengeling, Miller’s criminal defense attorney in Minnesota, decreased to comment, and his customer did not react to CNBC’s ask for remark.

‘Pump and discard’

Federal district attorneys in Minnesota state Miller targeted a minimum of 4 shell business in the plan that is the topic of the indictment versus him and his co-defendants in the criminal case, Jaberian and Christopher James Rajkaran.

That indictment stated the guys presumably utilized phony resignation letters from authorities of the business to take control of the inactive business.

They then provided incorrect or deceptive declarations by means of news release and social networks, along with the SEC’s own EDGAR public filing system, to declare the business had appealing brand-new organization chances, according to the charges.

Miller and his supposed co-conspirators purchased countless shares of these business, frequently for less than a cent, then offered those shares after pumping up the stock cost with their deceptive claims, the indictment stated.

Prosecutors think Miller and his partners made numerous countless dollars in illegal benefit from the supposed plan, a spokesperson for the U.S. Attorney’s Office in Minnesota informed CNBC.

The business were determined in the indictment as Digitiliti, Encompass Holdings, Bell Buckle Holdings and Utilicraft Aerospace Industries.

The SEC, in its civil lawsuit filed June 18 against Miller alone, identified three additional penny-stock companies also believed to be similarly targeted by Miller, beyond the four identified in the criminal case. Those three companies are Bebida Beverage Company, Simulated Environment Concepts and Strategic Asset Leasing.

Miller and New World Gold

All seven companies, like New World Gold, had been inactive before Miller got involved with them, court filings say.

The Florida Division of Corporations database indicated that New World Gold was reinstated on that database on June 4, after having been dormant for more than five years.

The company’s shares trade publicly on the over-the-counter market. New World Gold is listed by OTC Markets Group on its “Pink” platform, with a “No Information” warning. The “company may not be making material information publicly available,” that warning says.

The business has no record of any SEC filings, which include a company’s quarterly and annual financial statements, changes in executive positions, and other documents typically used by professionals and investors to make informed decisions about whether to buy or sell shares.

New World Gold’s reappearance on the Florida state corporate database came almost four months after someone identifying himself as a Minnesota resident named Mark Miller filed a lawsuit in Florida’s Palm Beach County court against New World Gold, seeking an order to hold a shareholder meeting.

A Palm Beach County judge in April granted the motion and ordered a shareholder meeting to be held on May 27, court records show.

Miller said in a June 17 court filing that during that shareholder meeting, “a motion was made to remove an existing director (who is physically incapacitated) and to have Mr. Miller elected as director.”

The same filing claims shareholders voted unanimously to elect Miller as director. 

New World Gold claimed in a June 11 press release that it acquired a mining business in Wyoming with access to gold and lithium. Lithium is a material used in batteries for personal electronics, as well as for electric vehicles.

A week later, on June 18, a press release claimed New World Gold had identified property in Nevada and South Dakota for mining.

The company said in a press release Friday that it had “officially acquired” a placer claim in South Dakota.

Posts on Twitter, Stocktwits, Reddit and Investors Hub referenced Miller as CEO of New World Gold.

“$NWGC power hour definitely still at a buy I bought some more off this little dip!! I have trust in the new CEO Mark Miller,” one Twitter user said on June 1.

“I think we get a lithium announcement with $nwgc,” another user tweeted on June 3.

“I followed the CEO on twitter Mark Miller … I expect him to drop BOMBS tomorrow!!!”

But the business tweeted on June 4 that it designated Ohio attorney Bob Honigford as its CEO and director.

A look for Honigford in the SEC files database returns no outcomes. He did not react to ask for remark by CNBC.

“So, no Mark Miller….,” a user stated in a Reddit online forum called NWGCShareholders.

“This is terrible news,” another user chimed in.

“Mark was the guy to get investor attention and reinstatement. Bob actually does business in the field,” a various user stated in the exact same thread.

New World Gold’s stock cost peaked on June 3 at around 4 cents.

But by Friday it was trading at less than a cent. That still was more than 8,000% greater than its 52-week low in December, prior to Miller’s claim.

The 30-day typical trading volume of New World Gold shares is more than 146 million shares altering hands daily.

New World Gold reacts

Following CNBC’s reporting on Miller’s indictment, New World Gold tweeted that Miller was not linked to the business, regardless of claims to the contrary in the Palm Beach County grievance.

“Miller has no control over Corporate activity or news releases, and he is NOT involved with the future expansion of Operations,” New World Gold tweeted on June 19.

David Rothstein, the attorney representing Mark Miller in the Palm Beach County court claim including New World Gold, also did not react to an ask for remark.

CNBC might not reach New World Gold at the e-mail address noted on its news release.

The SEC did not react to CNBC’s ask for remark.

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