berkowitz indictment
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UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF FLORIDA
CASE NO.
18 U.S.C. 5 37118 U.S.C. 1 981
UNITED STATES OF AM ERICA
VS.
JEFFREY BERKOW ITZ.
Defendant.
INFORM ATION
The United States Attorney charges:
GENERAL ALLEGATIONS
At a11 times relevant to this Information:
1 . The Pink OTC M arkets, lnc. was an inter-dealer electronic quotation and trading
system in the over-the-counter securities market commonly referred to as the ''Pink Sheets.''
2. Face Up Entertainment Group (''FUEG'') was a Florida corporation whose
common stoek was publicly quoted on the Pink Sheets and whose common stock was registered
with the Securities and Exchange Commission (''SEC'') under section 12 of the Securities
Exchange Act of 1934. Therefore, FUEG was required to file periodic reports with the SEC
disclosing all material facts related to the operation of the company.
CONSPIRACY TO COM M IT SECURITIES FRAUD
(18 U.S.C. 1 371)
From in or around December 2012, through in or around Febnmry 2013, in M iami-Dade
County and Broward County, in the Southern District of Florida, and elsewhere, the defendant,
14-20342-CR-SCOLA/VALLE
May 15, 2014
TBCase 1:14-cr-20342-RNS Document 1 Entered on FLSD Docket 05/15/2014 Page 1 of 6
JEFFREY BERKOW ITZ,
did willfully, that is, with the intent to further the object of the conspiracy, and knowingly
combine, conspire, confederate and agree with L.B. and others known to the United States
Attomey to knowingly and with intent to defraud execute a scheme and artifice to defraud any
person in connection with any security of an issuer with a class of securities registered under
section 12 of the Securities Exchange Act of 1934 and that is required to tile reports under section
15(d) of the Securities Exehange Act of 1934, that is, shares of FUEG common stock, and to
obtain, by means of materially false and fraudulent pretenses, representations and promises,
money and property in connection with the purchase and sale of said securities, in violation of
Title 18, United States Code, Section 1348.
PURPOSE OF THE CONSPIM CY
3. lt was the purpose of the conspiracy for JEFFREY BERKOW ITZ and co-
conspirator L.B. to unlawfully enrich themselves by, among other things, engaging in the
fraudulent manipulation of FUEG'S stock by artificially intlating FUEG trading volume and stock
share price, through an improper payment to an artiticial buyer and the timing of the issuance of a
FUEG press release.
M ANNER AND M EANS OF THE CONSPIRACY
The manner and means by which JEFFREY BERKOW ITZ and co-conspirator L.B.
sought to accomplish the object and purpose of the conspiracy included, but was not limited to, the
following:
4. From in around Decem ber 2012, through in or around February 20l 3, in a series of
meetings, telephone calls and electronic mailings with a cooperating source (''CS''), JEFFREY
BERKOW ITZ and co-conspirator L.B. agreed to pay the CS $5,000 to act as an artiticial buyer
2
Case 1:14-cr-20342-RNS Document 1 Entered on FLSD Docket 05/15/2014 Page 2 of 6
and purchase FUEG common stock on the open market.
Through the artificial buyer's purchase, JEFFREY BERKOW ITZ and
co-conspirator L.B. sought to manipulate the market and give the investing public the false
impression that FUEG'S stock price was rising and that there was a public market for FUEG stock.
OVERT ACTS
ln furtherance of the conspiracy and to accomplish its object and purpose, at least one
co-conspirator committed, and caused to be committed, in the Southern District of Florida and
elsewhere, at least one of the following overt acts, among others:
1 . On or about February 5, 2013, in M iami-Dade County, in the Southern District of
Florida, during a telephone call between co-conspirator L.B. and the CS, co-conspirator L.B.
stated that he ''had the 5 ($5,0001'' and then informed the CS that FUEG would be issuing a press
release soon conceming ''beta testing with Facebook.''
2. On or about February 6, 20l 3, in Broward County, the Southern District of Florida,
the co-conspirators caused $5,000 to be deposited into the CS's Bank of America account for the
fraudulent buying scheme. After this deposit into the CS's bank account, co-conspirator L.B.
called the CS and instructed him to ''check your B of A account.'' On this same date, JEFFREY
BERKOW ITZ had a conversation with this CS, in which JEFFREY BERKOW ITZ informed
the CS that i'this thing (FUEG stock! could go for to forty cents tomorrow.'' JEFFREY
BERKOW ITZ additionally told the CS to i'go in early'' when completing the purchase of FUEG
stock.
On or about February 7, 2013, co-conspirator L.B. sent a text m essage to the CS
infonning him that the previously mentioned advanced FUEG news would be issued the following
mom ing.
3
Case 1:14-cr-20342-RNS Document 1 Entered on FLSD Docket 05/15/2014 Page 3 of 6
4 .
behalf of the purported artificial buyer, purchased 35,000 shares of FUEG common stock on the
open market.
JEFFREY BERKOW ITZ and co-conspirator L.B. prepared and caused a FUEG
press release to be issued on February 8, 2013, which was designed and issued to give the investing
On or about February 8, 2013, a Federal Bureau of Investigation agent, acting on
public the false impression that the recent and positive market movement of FUEG stock was
induced by positive news about the company.
All in violation of Title 18, United States Code, Section 371.
FORFEITURE
(18 U.S.C. 1 981(a)(1)(C))
1.
reference for the pupose ofalleging criminal forfeiture to the United States of America of certain
property in which the defendant, JEFFREY BERKOW ITZ, has an interest.
The allegations in this Information are realleged and fully incoporated herein by
Upon conviction of a conspiracy to commit an offense involving fraud in the sale of
securities, as alleged in this lnfonnation, the defendant shall forfeit to tht United States of
America, pursuant to Title 18, United States Code, Section 981(a)(1)(C), any property, real or
personal, which constitutes, or is derived from, any proceeds traceable to such violation.
A1l pursuant to Title 1 8, United States Code, Section 981(a)(1)(C), as made applicable
by Title 28s United States Code: Section 2461(c), and the procedures set forth at Title 2 1, United
States Code 853. l N QW IFREDO A. FERRERUNITED STATES ATTORNEY
M lC AEL R. S -W IN7ASSISTA TATES ATTORNEY
4
Case 1:14-cr-20342-RNS Document 1 Entered on FLSD Docket 05/15/2014 Page 4 of 6
UNITED STATES DISTRICT COURTSOUTHERN DISTRIG OF FLORIDA
UNITED STATES OF AM ERICA
V$.
IEFFREY BERKOWITL
Defendant./
Court Division; (select one)
X Miami Key W estFTL W PB FTP
! do hereby certify that:
1. l have carefully considered the allegations of the indictment, the number of defendants, the number ofprobable witnesses and the Iegal complexities of the lndictment/lnformation attached hereto.
EASE NO.
CERTIFICATE OF TRIAL ATTORNEY*
Superseding Case lnformatlon:
New Defendantls)Number of New DefendantsTotal number of counts
Yes No
I am aware that the information supplied on this statement will be relied upon by the Judges of this Court insetting their calendars and scheduling criminal trials under the mandate of the Speedy Trial Act, Title 28
U.S.C. Section 3161.
Interpreter: (Yes or No) N0List language and/or dialect
This case will take Q days for the parties to try.
Please check appropriate category and type of offense Iisted below:
(check only one)
0 to 5 days6 to 10 days11 to 20 days21 to 60 days61 days and over
(Check only one)
iously filed in this District Court? (Yes or No) NO6. Has this case been prevIf yes:d e: Case NO.Ju g
(Attach copy of dispositive order)Iaint been filed in this matter? (Yes or No) NOHas a comp
If yes:Magistrate Case No.Related Miscellaneous numbers: - - -
Defendantts) in federal custody as ofDefendantls) in state custody as ofIe 20 from the Istrld ORu
X PettyM inorM isdem .Felony U -
Is this a potential death penalty case? (Yes or No) M N
Does this case originate from a matter pending in the Northern Region of the U.S. Attorney's Office prior to
October 14, 2003? Yes X No
ding in the Central Region of the U.S. Attorney's Office prior toDoes this case originate from a matter penSeptember 1, 20071 Yes X NO
!.
8.
*penalty Sheetls) attached
M ICHAEL R. ERWASSISTANT UNITED ATES AU ORNEY
Cout ID No. A5501230
REV 4/8/08
Case 1:14-cr-20342-RNS Document 1 Entered on FLSD Docket 05/15/2014 Page 5 of 6
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
PENALTY SHEET
Defendant's Name: JEFFREY BERKOW ITZ
Case No:
Count #: 1
Conspiracy to Commit Securities Fraud
Title 18. United States Codes Section 371
# M ax. Penalty: Five (5) years' imprisonment
Count #:
*M ax. Penalty:
Count #:
*M ax. Penalty:
Count #:
*M ax. Penalty:
WRefers only to possible term of incarceration, does not include possible fines, restitution,
special assessm ents, parole term s, or forfeitures that m ay be applicable.
Case 1:14-cr-20342-RNS Document 1 Entered on FLSD Docket 05/15/2014 Page 6 of 6
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