Tags: pump | dump | sentence | prison

Florida Man Gets Nine Years for $20 Million 'Pump and Dump'

Friday, 24 Jan 2014 02:19 PM

A Florida man was sentenced to nine years in prison for running a $20 million “pump and dump” scheme that manipulated the prices of penny stocks using the Internet and social media sites.

David Levy, 61, the former chief executive officer of Tube Media Corp., a penny-stock operation, and his wife, Donna Levy, were convicted in March of distributing misleading marketing materials for companies they helped take public, causing stock prices to rise. They then dumped shares into the market, rendering them valueless, prosecutors said.

David Levy helped find investors for two companies, Cardiac Network Inc., which traded under the ticker CNWI, and Banneker Inc., which traded under the symbol BANI.

Evidence at trial showed Levy offered to help the start-up companies obtain financing and agreed to coordinate investor relations and marketing in exchange for shares. Once the company went public, Donna Levy issued press releases on behalf of the targeted company with misleading recommendations.

‘Surreal’ Situation

David Levy, of Fort Lauderdale, today asked U.S. District Judge Paul Crotty in Manhattan for leniency, rejecting the government’s allegations that he defrauded thousands of investors in several schemes and calling the charges “absolute lies.”

“This whole situation has been surreal to me,” he said. “I’ve tried to help people all my life. I never meant to hurt anybody.”

Assistant U.S. Attorney Howard Master said the government sought a prison term of longer than 10 years.

“He is a man who’s left a trail of wreckage behind him,” Master said. “He’s destroyed many lives, many dreams and he’s cost many people a lot of money.”

Crotty said a significant prison term was warranted, noting that David Levy had prior convictions for financial swindles dating back to the 1970s.

“There’s another side to Mr. Levy’s life that he lives on the outskirts of the law and casts outside the limits to commit crimes,” Crotty said. “I’m certain a message has to be sent to Wall Street that pump and dump schemes, when they’re detected, will be appropriately punished when it’s done.”

David Levy was convicted of five counts, including conspiracy, securities fraud and money laundering. Donna Levy, who was convicted of conspiracy and securities fraud, is scheduled to be sentenced by Crotty Feb. 5.

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A Florida man was sentenced to nine years in prison for running a $20 million "pump and dump" scheme that manipulated the prices of penny stocks using the Internet and social media sites.
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2014-19-24
Friday, 24 Jan 2014 02:19 PM
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