The SEC today charged a shell packaging firm and several others for their roles in a penny stock scheme involving the issuance of purportedly unrestricted shares in the public markets. SEC Findings and Allegations. Joseph Meuse and his firm Belmont Partners LLC - which is in the business of identifying and selling public shell companies for use in reverse mergers - allegedly fabricated and back-dated documents used to convince a transfer agent and an attorney writing an opinion letter to issue free-trading shares of Alternative Green Technologies Inc. (AGTI). The SEC also charged AGTI and its CEO Mitchell Segal, along with Segal’s business partner Howard Borg and stock promoters David Ryan, Vikram Khanna, and Panascope Capital Inc., for their roles in the scheme that resulted in unknowing investors purchasing fraudulently issued AGTI shares without the protections afforded by the securities laws. In its complaint, filed in U.S. District Court for the Southern District of New York, the SEC also charged LI-based AGTI and CEO Segal (a licensed attorney) with knowingly submitting false documents to a transfer agent and an attorney, who then relied on these documents to issue legitimate free-trading shares of AGTI. VA-based Belmont Partners and Meuse aided and abetted AGTI’s fraud by knowingly creating and sometimes back-dating the false documentation, including a sham assignment of debt, and a fabricated and back-dated corporate resolution and convertible note.  The issued stock certificates were then used by Segal to fund campaigns promoting AGTI stock.  Stock promoters Ryan, Panascope Capital, and its president Khanna were charged with selling the unregistered securities. Securities Law Violations, Sanctions. All defendants were charged with violating Section 5 of the Securities Act of 1933;  AGTI and Segal, with violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5(a) and (c) thereunder.  Segal, Meuse and Belmont Partners are charged with aiding and abetting the fraud by AGTI. The SEC seeks to disgorge the defendants, and impose financial penalties against AGTI, Segal, Belmont Partners, Meuse, and Ryan.  Segal and Meuse also will be barred from certain securities activities, including involvement with penny stocks.  Relief defendants were also named. Borg, Khanna and Panascope Capital agreed to settle SEC charges - Khanna and Panascope Capital will pay $81K, and Borg will pay $35K, and surrender to the transfer agent for cancellation more than 4 million shares of AGTI stock that were illegally issued. Settlements are subject to court approval. SEC NYRO Staff Credits. Investigation by Megan Genet, Steven Rawlings. Litigation will be led by Todd Brody, Megan Genet.   [SEC PR 11-262, 12/12/11]