Three men who allegedly manipulated penny stocks, and then laundered the proceeds by purchasing precious metals, were charged today in U.S. District Court in Tacoma with conspiracy to commit securities fraud and conspiracy to launder monetary instruments.
U.S. Attorney Jenny A. Durkan said Mikhail Galas, 24, of Vancouver, Wash., was arrested in Long Beach, California after he arrived on a flight from Portland, Oregon. He will make his initial appearance in U.S. District Court in Los Angeles.
Christopher Mrowca, 24, was arrested in Bradenton, Florida and will make his initial appearance in Tampa. Alexander Hawatmeh, 23, of Salem, is incarcerated in Oregon on an unrelated charge and will appear in federal court at a later date.
According to the criminal complaint, between December 2011 and April 2012, the men engaged in a scheme to make it appear that a particular penny stock was being actively traded. During that period, they accounted for 85 percent of the trades in the particular stock related to a purported flea market business in Florida. The conspirators allegedly engaged in “matched trades” where one sold shares and the other bought shares to make it appear investors were interested in the company. In fact the penny stock had little value and no business that would generate significant revenue or income.
Conspiracy to commit securities fraud is punishable by up to five years in prison and a $250,000 fine. Conspiracy to launder monetary instruments is punishable by up to 20 years in prison. The charges contained in the complaint are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.