GA Atty Marc Bercoon & William Goldstein Get 10 Yrs In ‘Pump-and-Dump’ Stock Scheme

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In a pump-and-dump scheme, fraudsters artificially boost a stock’s price and generate demand through investment calls, often misleading news releases, bogus SEC filings, mass mailings and other publicly circulated “tips.”

GA Atty Marc Bercoon & William Goldstein Get 10 Yrs In 'Pump-and-Dump'  Stock Scheme

A metro Atlanta business entrepreneur and his lawyer were sentenced to a decade in prison for illegally siphoning millions of dollars from unwitting investors through two separate stock market schemes.

Judge Leigh Martin May of the U.S. District Court for the Northern District of Georgia sentenced attorney Marc Bercoon, 57, of Atlanta, and William Goldstein, 54, of Alpharetta, to 10-year sentences Tuesday after a two-day hearing. The federal jury in Atlanta convicted them of conspiracy, mail fraud, wire fraud and securities fraud in February for their role in what’s known as a “pump-and-dump” scheme.

In a pump-and-dump scheme, fraudsters artificially boost a stock’s price and generate demand through investment calls, often misleading news releases, bogus SEC filings, mass mailings and other publicly circulated “tips.” As stock purchases soar and the price increases, the scheme’s originators dump their stock on the market, making a killing as they drag down the artificially high cost of shares to the detriment of investors.

Federal prosecutors in Atlanta have said the two men and a third man, Peter Veugeler, who testified after reaching a separate plea deal, manipulated the price of stock shares for MedCareers Group Inc., a publicly traded company that operates an informational job search website for nurses, nursing schools and nursing organizations. Bercoon and Goldstein made more than $2.5 million by rigging the market, prosecutors said.

Veugeler, 49, of Windermere, Florida, pleaded guilty to conspiracy to commit securities fraud and wire fraud. He’s scheduled to be sentenced Thursday. Federal prosecutors have recommended a sentence capped at five years.

Bercoon and Goldstein also channeled about $1.5 million of their investors’ money into their own private business ventures and to pay their personal expenses, prosecutors and court documents said.

Bercoon and Goldstein conspired to manipulate the market over two years from July 2009 through September 2011, prosecutors said.

Bercoon and Goldstein also organized a second private company, Find.com Acquisition Inc., then lured investors by telling them their money would be used to develop an internet search engine known as Find.com, according to court records and federal prosecutors.

Instead, the duo used most of the money to subsidize other business ventures and pay themselves and their family members, prosecutors and court records said.

U.S. Attorney Byung J. “BJay” Pak said in a written statement issued after the hearing, “These defendants manipulated the stock of a  publicly traded company by orchestrating two schemes, netting over $2.5 million from investors. At the same time they were rigging the stock market, the defendants fleeced dozens of investors in a separate fraud scheme.”

Atlanta criminal defense attorney Paul Kish, who represented Bercoon, said the imposed sentence is longer than the five to eight years that might generally be imposed elsewhere. Kish also said there were more culpable defendants who actually orchestrated the stock trades who received shorter sentences than either Bercoon or Goldstein.

In his sentencing memorandum, Kish said investors were warned Find.com “was a highly speculative investment. Each knew that he or she could lose their entire investment because of the speculative nature of the company,” and that when shares were being marketed they appeared at the time “to be a worthwhile long-term investment.”

Bercoon’s offenses and that of his cohorts, Kish argued, “were efforts to make businesses work, not simply a method for the defendants to line their pockets.”

He also called Bercoon “an honorable family man who has mostly lived a good life. “

Public defender Thomas Hawker represented Goldstein.

Hawker argued in a sentencing memorandum that “both of the businesses at issue were indeed real businesses that Messrs. Goldstein and Bercoon were trying to finance. They were not sham businesses or hollow fraud schemes.”

Goldstein “spent thousands of dollars of his own money and a substantial amount of time and energy trying to make both businesses work,” Hawker said. “In that way, this case is vastly different from many fraud cases that are merely schemes to steal without any substance or real businesses behind them.”

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