(Adds Excel comment, paragraph 16)
By Nate Raymond and Jonathan Stempel
NEW YORK, July 17 U.S. authorities unveiled
criminal charges on Thursday accusing seven people, including a
banking executive once married to a star of "The Sopranos," of
running a $300 million stock manipulation scheme that cheated
elderly and other investors.
Abraxas Discala, the chief executive officer of merchant
banking firm OmniView Capital Advisors and former husband of
Jamie-Lynn Sigler, who played Meadow Soprano on the hit HBO
series, was charged in an indictment unsealed in Brooklyn, New
York, with 10 criminal counts including securities fraud, wire
fraud and conspiracy.
Discala, who is 43 and known as A.J., and the other
defendants were accused of using "pump-and-dump" and other
illegal tactics to artificially control prices and trade volumes
in four companies from October 2012 to July 2014.
Authorities said they used wiretaps to help uncover the
scheme, which involved misleading press releases and regulatory
filings, rapid trading, concealing conspirators' ownership
stakes, and unauthorized purchases for unwitting investors.
"When the defendants stopped their criminal game of musical
shares, it was the unsuspecting investors who were left holding
the bag," Brooklyn U.S. Attorney Loretta Lynch told a news
Joseph Tacopina, a lawyer for Discala, said: "Anyone who
knows A.J. is shocked by these allegations. And that is exactly
what they are, merely allegations."
The four companies are CodeSmart Holdings Inc,
Cubed Inc, StarStream Entertainment Inc and
Staffing Group Ltd.
Others indicted were OmniView President Marc Wexler, 52;
CodeSmart CEO Ira Shapiro, 53; brokers Matthew Bell, 47, and
Craig Josephberg, 41; Kyleen Cane, 59, a Las Vegas lawyer; and
Victor Azrak, 32, vice president of Excel Corp.
The U.S. Securities and Exchange Commission brought civil
charges against all but Cane and Azrak.
"This was a brazen manipulation scheme calculated to enrich
Discala and his accomplices using, in many cases, the retirement
savings of innocent and unwitting retail investors," SEC
enforcement chief Andrew Ceresney said.
Lynch said the scheme boosted the stocks' market caps to
$300 million, causing investor losses of at least $50 million
alone on CodeSmart, the first company targeted.
Law enforcement intervened before unsuspecting investors
could lose money in the other companies, she said.
Text messages and phone calls were often used to manipulate
prices, authorities said.
For example, Discala allegedly messaged Bell on May 13, 2014
about StarStream, whose ticker is SSET and was trading at 35
cents per share: "We got good stuff going. Sset. Should be over
a buck today." The stock price tripled that day to $1.05.
CodeSmart in March said former New York Governor David
Paterson joined its advisory board. Neither Paterson nor Sigler,
who was married to Discala from 2003 to 2006, was accused of
A woman who answered OmniView's phone said the firm would
not comment. Lawyers for other defendants would not comment or
could not immediately be located. CodeSmart did not respond to
requests for comment. Excel said Azrak resigned as a company
officer in January 2013 and director five months later.
(Reporting by Nate Raymond and Jonathan Stempel in New York;
Editing by Tom Brown)