New York Man Pleads Guilty to Conspiracy and Tax Offenses Stemming from Stock "Pump and Dump" Scheme

[nitpicker]

https://www.justice.gov/usao-ct/pr/new-york-man-pleads-guilty-conspiracy-and-tax-offenses-stemming-stock-pump-and-dump

Department of Justice
U.S. Attorney’s Office
District of Connecticut

FOR IMMEDIATE RELEASE
Wednesday, August 9, 2017

New York Man Pleads Guilty to Conspiracy and Tax Offenses Stemming from Stock "Pump and Dump" Scheme

Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that BRIAN FERRAIOLI, 40, of Sayville, N.Y., waived his right to be indicted and pleaded guilty today in New Haven federal court to conspiracy and tax offenses stemming from his role in a securities fraud scheme.

According to court documents and statements made in court, between approximately 2009 and July 2016, FERRAIOLI conspired with others, including Christian Meissenn, William Lieberman, Damian Delgado and Thomas Heaphy, to defraud investors through a stock “pump and dump” scheme. FERRAIOLI and his co-conspirators induced investors to purchase securities by making false and misleading representations in calls, emails and press releases concerning the securities and the issuing companies, thereby causing the price of those securities to become falsely inflated. The issuing companies, which were essentially shell companies with virtually no legitimate business activities, included Terra Energy Resources Ltd. (stock symbol “TRRE”); Mammoth Energy Group, Inc. (stock symbol “MMTE”), a company that later became Strategic Asset Leasing Inc. (stock symbol “LEAS”); Trilliant Exploration Corporation (stock symbol “TTXP”); Hermes Jets, Inc. (stock symbol “HRMJ”), which later became Continental Beverage Brands Corporation (stock symbol “CBBB”); Dolat Ventures, Inc. (stock symbol “DOLV”), and Fox Petroleum, Inc. (stock symbol “FXPT”).

FERRAIOLI’s numerous misrepresentations induced investors to purchase securities, thus causing the share price of the securities to become artificially inflated. Certain of FERRAIOLI’s co-conspirators then sold their own preexisting positions in the securities at a profit. They then allowed he price of the securities to fall, leaving investors with worthless and unsalable stock. As a result, victim investors lost approximately $19.5 million.

FERRAIOLI received approximately 25 percent of all money that he induced individuals to invest. His personal gain from the scheme totaled approximately $1.25 million. FERRAIOLI disguised the income by having the funds flow through the trust accounts of various attorneys, including Corey Brinson in Connecticut, into bank accounts in the name of various shell entities under FERRAIOLI’s control. FERRAIOLI’s failure to pay taxes on approximately $1.1 million in income from this scheme, as well as unrelated income, during the 2010, 2012, 2015 and 2016 tax years resulted in a loss of $305,733 to the Internal Revenue Service.
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