Atlanta exec headed to jail for 'pump and dump' fraud scheme

[Guest guest]

Atlanta Business Chronicle - 3:11 PM EST Friday

http://atlanta.bizjournals.com/atlanta/stories/2006/02/13/daily49.htm

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Bizjournals.com - Charlotte,NC

Atlanta exec headed to jail for 'pump and dump' fraud scheme

The former CEO of a Norcross, Ga., biotechnology company has been

sentenced to nearly seven years in federal prison and fined about

$1.7 million for securities fraud and perjury.

C. Moses of Atlanta, former president and CEO of

International BioChemical Industries Inc. (ICBL), was convicted on

Oct. 27, 2005, following a two-week jury trial. On Feb. 17, U.S.

District Judge C. Pannell sentenced Moses to six years and

six months in federal prison to be followed by five years of

supervised release. Moses also must pay $1.65 million in restitution

to IBCL shareholders.

" This case was particularly significant in that the defendant took

advantage of the FBI's investigation of the deadly anthrax mailings

to defraud his shareholders, making a personal profit at their

expense, " said U.S. Attorney E. Nahmias.

Prior to its bankruptcy in 2004, ICBL -- formerly BioShield

Technologies Inc. -- made and sold antimicrobial products. IBCL's

common stock was once listed on NASDAQ, but during the time in

question was traded on the Over-the-Counter Bulletin Board.

Between Jan. 29 and Feb. 6, 2003, Moses issued a series of press

releases falsely implying the FBI, which had contacted Moses in

connection with its investigation of the Fall 2001 anthrax mailings,

was interested in procuring IBCL's products. Although IBCL had

sought EPA approval to market a product called " AnthraxShield " as

being effective against anthrax, the EPA had rejected IBCL's test

data and refused to license the product months before the FBI

contacted the company in January 2003.

The FBI's interest in IBCL was purely investigative; specifically,

whether IBCL or any of its personnel had access to deadly anthrax

spores or whether the company stood to benefit commercially from the

anthrax attacks.

The press releases led to a sharp increase in IBCL's stock price and

trading volume. In the six days following the first press release,

the price of IBCL stock increased by more than 500 percent, and the

number of shares traded rose from a daily average of several hundred

thousand to a high of more than 40 million. In all, more than 118

million shares were traded during this time period.

Moses took advantage of the fraudulently inflated market for IBCL

stock to sell his own shares in the company, gaining about $70,000

in proceeds, and to advise other stockholding creditors of the

company to sell their shares. The SEC suspended trading in IBCL

stock on Feb. 6, 2003. When trading in the stock resumed, its price

plummeted, causing nearly $2.2 million in losses to investors.

In his deposition before the SEC in a subsequent civil enforcement

action, Moses lied about his personal IBCL stock sales, claiming he

was unaware the sales had occurred. But evidence presented at Moses'

trial showed he had called his stock broker more than 50 times

during the three-day period in which he sold stock. The SEC referred

the case to the U.S. Attorney's Office for prosecution after Moses

perjured himself in his SEC deposition.

[Guest guest]

wow ....... shaking head

tigerpaw2c <tigerpaw2c@...> wrote: Atlanta Business Chronicle - 3:11 PM

EST Friday

http://atlanta.bizjournals.com/atlanta/stories/2006/02/13/daily49.htm

l

Bizjournals.com - Charlotte,NC

Atlanta exec headed to jail for 'pump and dump' fraud scheme

The former CEO of a Norcross, Ga., biotechnology company has been

sentenced to nearly seven years in federal prison and fined about

$1.7 million for securities fraud and perjury.

C. Moses of Atlanta, former president and CEO of

International BioChemical Industries Inc. (ICBL), was convicted on

Oct. 27, 2005, following a two-week jury trial. On Feb. 17, U.S.

District Judge C. Pannell sentenced Moses to six years and

six months in federal prison to be followed by five years of

supervised release. Moses also must pay $1.65 million in restitution

to IBCL shareholders.

" This case was particularly significant in that the defendant took

advantage of the FBI's investigation of the deadly anthrax mailings

to defraud his shareholders, making a personal profit at their

expense, " said U.S. Attorney E. Nahmias.

Prior to its bankruptcy in 2004, ICBL -- formerly BioShield

Technologies Inc. -- made and sold antimicrobial products. IBCL's

common stock was once listed on NASDAQ, but during the time in

question was traded on the Over-the-Counter Bulletin Board.

Between Jan. 29 and Feb. 6, 2003, Moses issued a series of press

releases falsely implying the FBI, which had contacted Moses in

connection with its investigation of the Fall 2001 anthrax mailings,

was interested in procuring IBCL's products. Although IBCL had

sought EPA approval to market a product called " AnthraxShield " as

being effective against anthrax, the EPA had rejected IBCL's test

data and refused to license the product months before the FBI

contacted the company in January 2003.

The FBI's interest in IBCL was purely investigative; specifically,

whether IBCL or any of its personnel had access to deadly anthrax

spores or whether the company stood to benefit commercially from the

anthrax attacks.

The press releases led to a sharp increase in IBCL's stock price and

trading volume. In the six days following the first press release,

the price of IBCL stock increased by more than 500 percent, and the

number of shares traded rose from a daily average of several hundred

thousand to a high of more than 40 million. In all, more than 118

million shares were traded during this time period.

Moses took advantage of the fraudulently inflated market for IBCL

stock to sell his own shares in the company, gaining about $70,000

in proceeds, and to advise other stockholding creditors of the

company to sell their shares. The SEC suspended trading in IBCL

stock on Feb. 6, 2003. When trading in the stock resumed, its price

plummeted, causing nearly $2.2 million in losses to investors.

In his deposition before the SEC in a subsequent civil enforcement

action, Moses lied about his personal IBCL stock sales, claiming he

was unaware the sales had occurred. But evidence presented at Moses'

trial showed he had called his stock broker more than 50 times

during the three-day period in which he sold stock. The SEC referred

the case to the U.S. Attorney's Office for prosecution after Moses

perjured himself in his SEC deposition.

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