Scott F. Gelbard, a former stock promoter, was charged in U.S. District Court in Boston with conspiring to commit securities fraud. Gelbard, who is originally from Colorado and now lives in Canada’s Pacific Northwest, was indicted on one count of securities fraud and one count of conspiracy to commit securities fraud, stated Amy Hosney, public information officer for the IRS Criminal Investigations division.
According to the indictment, Gelbard and his partners owned and operated Regency Group, LLC, a stock-promotion company in Colorado. The group hired a disbarred attorney to set up brokerage accounts in the name of faux Panamanian entities that the ex-attorney managed in order that Gelbard could secretly gather and later sell stock in companies that they were promoting.
One of the companies was Greenchek Technology, Inc ., a firm that supposedly produced gasoline-emission-reduction products. Starting in 2008, Gelbard and his partners allegedly began transferring Greenchek shares they had gotten to the entities controlled by the ex-attorney. They then intentionally failed to file required disclosures that they had accumulated over 85% of Greenchek’s available shares, regardless of SEC rules that such disclosures be made when ownership of a company’s stock exceeds five percent. As alleged in the indictment, Gelbard then hired a company to distribute certain promotional materials concerning Greenchek, including a series of press releases issued between February and June 2009.
Beginning in February 2009, Gelbard and his partners began selling the stock held in the names of the fake Panamanian entities, generating more than $4 million in proceeds by June 2009. At Gelbard’s direction, the former attorney then laundered the proceeds through accounts in Panama and transmitted the money to accounts that Gelbard and his partners controlled or to pay debts that they owed.
The indictment occurred in Massachusetts as a number of the victims were from the state.
Upon conviction, Gelbard could be sentenced to up to a maximum of twenty years in prison, three years probation, and heavy fines.
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