The attorneys of Gana Weinstein LLP currently represent approximately 20 investors ensnared in Edward Durante’s (Durante), Christopher Cervino’s (Cervino), and Larry Werbel’s (Werbel) investment fraud scheme to manipulate the value of a number of penny stocks including VGTel, Inc. (VGTel), QLotus Holdings Inc., Haddad-Wylie Industries LLC (HWIC) and Cassidy Ventures, Inc. (CSVN). Recently, in simultaneous actions The Securities and Exchange Commission (SEC) and the United States Attorney for the Southern District of New York working with the Federal Bureau of Investigation (FBI) have filed charges against the foregoing individuals alleging that Durante and his co-conspirators defrauded more than 100 investors of at least $15,000,000.
The SEC’s and FBI’s charges mirror many of the allegations that been made by our clients. Durante is a repeat securities offender who was previously convicted in December 2001 of securities fraud, wire fraud, and money laundering barred by the SEC. Durante and his co-conspirators most recent fraud involved allegations of making false and misleading representations to investors to obtain funds to manipulate the public market in VGTL stock. Further, it was alleged that these individuals took advantage of their manipulation of the market to con investors into purchasing stock at inflated prices.
The defendants manipulated VGTL stock by allegedly controlling the majority of the public shares and then inducing investors to buy stock based on false representations and omissions, made unauthorized trades, and engaged in trades in which the defendants controlled both the accounts that purchased the stock and the accounts that sold the stock in order to artificially inflate the stock price and trading volume. Of the approximately $15 million invested in the fraudulent scheme, more than $9 million has been alleged to have been funneled to the defendants and other co-conspirators. For Werbel’s and Cervino’s efforts, the brokers received kickbacks and compensation from Durante.