MicroCap Market Manipulator Sentenced To 87 Months In Prison
On January 30, 2019, David Aubel of North Carolina was sentenced by U.S. District Court Chief Judge Patti B. Saris to 87 months in prison, five years of supervised release and ordered to pay restitution in the amount of $242,553. In November 2017, Aubel pleaded guilty to one count of conspiracy to commit securities fraud and wire fraud, one count of securities fraud, and three counts of wire fraud.
In 2016, Aubel and co-conspirator Robert Raffa, of Penacook, N.H., were arrested and charged in a criminal complaint in connection with their involvement in a scheme to manipulate the market for the publicly traded securities of Green Energy Renewable Solutions, Inc., a penny stock company that claimed to be in the business of developing and operating waste processing and recycling facilities near Detroit, MI. Raffa previously pleaded guilty and was sentenced in January 2018 to two years in prison and two years of supervised release.
In early 2012, Raffa and Aubel used four foreign entities to covertly acquire nearly all of Green Energy’s unrestricted stock without reporting their controlling interest as required by law. They then hired a promoter to send blast e-mails touting Green Energy to potential investors, all while selling shares without disclosing that they had orchestrated the campaign encouraging investors to buy.
The initial promotion enabled Raffa and Aubel to sell more than 1.5 million shares of Green Energy stock for proceeds of about $900,000. However, Raffa and Aubel continued to control a substantial amount of Green Energy stock after the promotion ended, and they used manipulative trading techniques to stabilize Green Energy’s stock price while they searched for another promoter to run a second touting campaign. Their search led them to a stock promoter who was secretly cooperating with federal agents and an undercover agent who claimed to have access to a network of corrupt stockbrokers who would buy their shares in exchange for kickbacks. Raffa and Aubel executed a trade in which they sold 174,000 shares of their Green Energy stock to an account purportedly controlled by a corrupt broker, which was in fact controlled by federal authorities. Following the trade, the conspirators wired a $6,000 kickback payment to an account they believed to be controlled by the corrupt broker, but which was actually controlled by federal authorities.
In November 2018, Aubel was charged with bail jumping after repeatedly failing to appear for sentencing before Judge Saris. U.S. Marshals located and apprehended Aubel as he exited a hotel in Charlotte, NC.
In a parallel action, the Securities and Exchange Commission (SEC) previously charged Aubel and Raffa with securities fraud in connection with the scheme.
United States Attorney Andrew E. Lelling and Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement. Gregory Allyn Forest, U.S. Marshal of the Western District of North Carolina, and John Gibbons, U.S. Marshal of the District of Massachusetts provided assistance with the apprehension. The United States Attorney’s Office received valuable assistance from the SEC. SEC Attorney Andrew Palid, who was appointed as a Special Assistant U.S. Attorney, and Jordi de Llano, Deputy Chief of Lelling’s Securities & Financial Fraud Unit, prosecuted the case.
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