The SEC, U.S. Attorney for Massachusetts, and the FBI announced parallel cases filed in federal court against corporate officers, lawyers, and a stock promoter, for allegedly using kickbacks and other schemes to manipulate investments in thinly traded stocks.  Thirteen (13) defendants were criminally charged and trading in the securities of 7 companies was suspended. The court filings noted that the schemes involved secret kickbacks to a supposed investment fund representative in exchange for having that investment fund buy stock in certain companies.  The kickbacks were disguised as fees paid pursuant to sham consulting agreements.  Unbeknownst to the insiders and the promoter, the investment fund rep was actually an undercover agent. A Year-Long Investigation. The charges culminate a year-long investigation focusing on preventing fraud in the micro-cap stock markets - i.e., publicly-traded penny stock companies.  Regulators have been increasing their focus on such frauds, because trading in these types of companies can easily be controlled by limited numbers of people and information about the companies is hard to come by. The SEC suspended trading in 7 microcap companies:

• 1st Global Financial Inc. (FGFB) - Las Vegas, NV
• Augrid Global Holdings Corp. (AGHD) - Houston, TX
• ComCam International, Inc. (CMCJ) - West Chester, PA.
• MicroHoldings US, Inc. (MCHU) - Vancouver, WA.
• Outfront Companies (OTFT) - FL.
• Symbollon Corp./Symbollon Pharmaceuticals, Inc. (SYMBA) - Medfield, MA.
• ZipGlobal Holdings Inc. (ZIPG) - Hingham, MA.

These latest charges follow a series of similar cases filed by the SEC in October 2010 and June 2011 in which more than a dozen companies and penny stock promoters were charged in similar kickback-for-investment schemes. Individuals charged today:

• Kelly Black-White, 51, of Ariz. (Operator of Premier Funding, Inc. and Premiere Services, Inc.).
• James Prange, 60, of Wis. (Northern Equity, Inc.).
• Michael Lee, 51, of Mass. (CEO of ZipGlobal).
• Edward Henderson, 69, of R.I..
• Paul DesJourdy, 50, of Mass. (CEO of Symbollon Pharmaceuticals).
• James Wheeler, 51, of Wash. (CEO MicroHoldings, Inc.).
• Steve Berman, 49, of  Ohio (CEO of China Wi-Max Communications).
• Richard Kranitz, 68, of Wis. (Board Member of China Wi-Max Communications).
• JC Jordan, 60, of Calif. (CEO of Vida Life International, LTD).
• Karen Person, 61, of Ill. (President of Small Business Company, Inc.).
• Albert Reda, 65, of  Calif. (Treasurer of 1st Global Financial).
• Steve Stuart, 48, of Md. (Major Shareholder in ComCam International, Inc.).
• Muhammad (“M.J.”) Shaheed, 44, of Texas (CEO of Augrid Global Holdings Corporation).

The SEC also filed civil charges of securities fraud against Desjourdy, Henderson, Lee and Wheeler alleging they defrauded investors through the use of kickbacks in financing transactions. If convicted... the defendants charged with mail fraud and wire fraud each face up to 20 years in prison, to be followed by 3 years of supervised release and a $250,000 fine on each count.  If convicted on the conspiracy to commit securities fraud charges, the defendants each face up to five years in prison, to be followed by 3 years of supervised release and a $250,000 fine on each count. For further details and access to SEC Complaints, go to:   [SEC PR 11-251, 12/1/11].