BROOKLYN, NY
Darren Ofsink, a Manhattan attorney and founder of Ofsink LLC; Michael Morris, a registered broker and managing director of Halcyon Cabot Partners Ltd and Darren Goodrich, another registered brother were arrested today.
The trio were charged with securities fraud, wire fraud, and conspiracy to commit securities fraud, mail fraud, and wire fraud in connection with a $300 million market manipulation scheme, officials said.
In addition to the three defendants arrested today, officials said the eleven-count superseding indictment unsealed today charges four additional defendants who were arrested in July 2014:
- Abraxas J. Discala, also known as “AJ Discala,” the Chief Executive Officer of OmniView Capital Advisors LLC
- Ira Shapiro, the Chief Executive Officer of CodeSmart Holdings, Inc., a publicly traded company
- Craig Josephberg, a registered broker
- Kyleen Cane, a Las Vegas attorney and managing partner of Cane Clark LLP
Three defendants, Marc Wexler, Matthew Bell, and Victor Azrak, who were charged in the underlying indictment, plead guilty and are awaiting sentencing.
“As alleged, licensed professionals such as Ofsink, Morris, and Goodrich abused their positions of trust and became part of an elaborate scheme designed to defraud the securities markets and the investing public through false and misleading press releases and manipulated trading activity. The three were entrusted to be gatekeepers to the securities markets but instead perpetrated one of the largest market manipulation schemes ever, and by doing so, preyed upon unsuspecting and elderly investors,” stated U.S. Attorney Robert L. Capers.
Adding, “Today’s three arrests and the seven arrests last year, reflect the scope of this fraud and our commitment to bring to justice those who abuse our financial markets in order to fraudulently enrich themselves.”
“Using investment schemes like ‘pump and dump,’ ‘wash trades,’ and ‘match trades,’ the defendants were able to manipulate stock prices to profit themselves while defrauding unsuspecting investors. The FBI is committed to investigating and bringing to justice those who prey upon trusting individuals for their own personal gain.” stated FBI Assistant Director-in-Charge Diego Rodriguez.
The indictment and other court filings stated that between October 2012 and July 2014, the defendants agreed to defraud investors and potential investors in four public companies.