Stock Manipulators Sentenced in Texas to Prison for $1 Million Securities Fraud Scheme | WPN World People News

An employee of a Texas securities firm and a broker-dealer who conspired with him and others to artificially pump up the stock prices of several publicly traded companies were sentenced to prison terms today for their roles in the $1 million scheme, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and Assistant Director in Charge of the FBI’s Washington Field Office Valerie Parlave.

Blake Williams, 30, of Dallas, and Derek Lopez, 46, of Torrance, California, were sentenced to 32 and 24 months in prison, respectively. U.S. District Judge Ed Kinkeade imposed the sentences today in Dallas federal court. In addition to the prison terms, Williams was ordered to forfeit $125,000; Lopez was ordered to forfeit $72,442; and the pair was sentenced to serve two years of supervised release. Each defendant previously pleaded guilty to one count of conspiracy and one count of securities fraud.

Williams was an employee of TBeck Capital Inc., a purported investment banking and securities trading firm in Grapevine, Texas. Lopez was a securities broker-dealer who provided services to TBeck Capital. According to court documents, from June 2006 through December 2008, Williams, Lopez, and their co-conspirators engaged in a scheme to manipulate the price and volume of stocks traded in the over-the-counter market.

According to court documents, companies owned and controlled by a co-conspirator obtained control of large positions of free-trading stock in various publicly traded companies. Williams, Lopez, and others then coordinated trades with each other and with other alleged co-conspirators to create the false appearance of greater investor interest in the stock. Williams and Lopez admitted to trading stock in their own names as well as through TBeck Capital and other companies to keep the stock price artificially inflated. These actions allowed the defendants and their alleged co-conspirators to then sell that stock at an artificially high price.

Specifically, Lopez admitted to trading in his own name, as well as in the name “Da Big Kahuna” to disguise his trades. Williams admitted to trading in the names of several companies to make it appear there were multiple unrelated entities buying and selling the stock. According to court documents, Williams received cash payments and Lopez received free-trading stock and cash payments in return for their assistance in manipulating the stock prices of companies in which TBeck Capital owned and controlled large positions of free-trading stock.

The gain to all the co-conspirators from the fraudulent scheme exceeded $1 million, according to court documents.

The case is being prosecuted by Senior Trial Attorney Nicholas Acker and Trial Attorney Luke B. Marsh of the Criminal Division’s Fraud Section and is being investigated by the FBI’s Washington Field Office. The U.S. Attorney’s Office for the Northern District of Texas provided valuable assistance.

Source: U.S. Department of Justice