|.Scottsdale man accused of stock fraud |
By Ken Alltucker The Republic | azcentral.com Sat Feb 16, 2013 6:02 PM
A Scottsdale man is part of a group accused of orchestrating a “pump-and-dump” stock fraud that authorities allege took in at least $30 million from more than 20,000 investors by manipulating share prices in small publicly traded companies.
Mark Harris, 56, of Scottsdale, was involved in two trading schemes, according to two related criminal cases unsealed last week in U.S. District Court in Los Angeles. Harris, who was arrested last week, is described as a stock promoter and managing member of Scottsdale-based investor-relations-firm Apache Capital LLC.
The indictments said the individuals targeted small firms such as pharmaceutical and hair-restoration companies, promoted those firms through marketing and sham news releases to increase trading volume and share prices and then sold the shares to investors who were unaware of the stock manipulation.
The two cases involved criminal indictments of 15 individuals. Harris, who did not return a call last week, is one of five individuals named in both indictments.
Regis Possino, 65, a former Los Angeles County deputy district attorney, was also involved in both cases and was a ringleader in one case, according to the U.S. Attorney’s Office in Los Angeles. Sherman Mazur, 63, of Los Angeles, was the lead defendant in the second related case. Neither Possino nor Mazur could be reached last week.
Hollywood personalities Pamela Anderson and Eric Roberts appeared in infomercials and other television shows to tout the companies targeted by the individuals, but neither celebrity was accused of wrongdoing.
One indictment focused on deals involving two companies called GenMed, a generic-drug distributor based in the Netherlands, and Clearwater, Fla.-based Biostem, which offered stem-cell therapies and hair-growth technology.
The indictment showed numerous examples of how the individuals sought to drive the companies’ share prices higher by issuing new releases and having celebrities tout the companies on television.
Before one actor’s appearance on the program Access Hollywood, two individuals involved in the promotion discussed how the television appearance could drive GenMed’s stock to reach 50 cents by the end of the day.
In a conversation with one investor, Mazur described Biostem as “ a shell with a lot of shares out, with nothing in it ...” according to the indictment.