VIRGINIA
An indictment unsealed today in federal court alleges nine the defendants artificially “pumped” or inflated the trading volume and price of the securities by touting business activities and deceptive revenue forecasts, and by engaging in coordinated trading activity to create the appearance of increasing market demand.
The defendants then allegedly “dumped” or sold the securities at the inflated prices and laundered the proceeds from their scheme through bank accounts in the United States and overseas.
The stock manipulation and money laundering resulted in $6.5 million in illegal profits, according to officials.
The nine named in the indictment filed June 25 are the following defendants:
- Harold Bailey Gallison II, 57, of Valley Center, California
- Anna Hiskey, 42, of Costa Rica
- Michael Randles, 47, of Costa Rica
- Roger Coleman, 79, of Las Vegas
- Carl Kruse Sr., 75, of Miami
- Carl Kruse Jr., 50, of Miami
- Frank Zangara, 52, of Locust Valley, New York
- Mark Dresner, 59, of Dix Hills, New York
- Charles Moeller, 46, of Sea Cliff, New York
According to the allegations in the indictment, the scheme was facilitated through an offshore brokerage and money laundering platform controlled by Gallison that went by various names, including Sandias Azucaradas, Moneyline Brokers and Trinity Asset Services (collectively, Moneyline).
The defendants allegedly used Moneyline to create nominee accounts in the names of shell companies, and used those accounts to conceal both the true source and ownership of the securities and the flow of funds.
The indictment alleges that conspirators also took elaborate steps to hide their illegal conduct from law enforcement, including the use of internal chat and telephone systems
In a recorded call from 2010, officials allege Gallison told Randles that Moneyline maintained a private internal telephone system that did not go through a U.S. server on which he and Randles could hold “private conversation[s] that the Fed cannot get a wiretap on.”
In another conversation with Randles, Gallison noted that Moneyline’s proprietary internal chat system, which did not retain records of chats, was better than an internet service provider because “if the Fed came in with a search warrant, they’d take your computer and it’d have your last ninety days’ worth of Yahoo messengers and Skype chats.”
The defendants are presumed innocent until and unless proven guilty.
Nine Defendants indicted Stock Manipulation