In its continuing effort to fight fraud that is all too common in the micro-cap market, the Securities and Exchange Commission has charged eight people with fraud in a penny stock pump-and-dump scheme involving a California company currently known as Gepco Inc that has changed its name and line of business several times in the last couple of years.

SEC filings SEC Enforcement

“Microcap fraud is a scourge on our markets, and we are aggressively pursuing scurrilous penny stock schemers who make their living by preying upon innocent investors,” said Andrew M. Calamari, Director of the SEC’s New York Regional Office in a statement.

SEC: Gepco supposedly dealt in everything from social media to high end diamonds

According to the SEC, Izak Zirk de Maison (nee Engelbrecht) controlled a shell company incorporated in 2008 and set up a number of reverse mergers to changes its name and apparent business from equipment leasing to prepaid cards to a company called WikiFamilies that played on the well-known Wikipedia and claimed to operate a social media website. In 2013 de Maison tried and failed to merge Gepco with a mixed martial arts company, and then created his own company that claimed to be in the diamond business and merged it with Gepco.

De Maison allegedly controlled the company from behind the scenes

The SEC alleges that de Maison, along with wife Angelique de Maison convinced six other people to help them buy, sell, and promote the stocks. James Cope, who has a record of securities fraud, allegedly sold 2.5 million shares of Gepco with the help Louis Mastromatteo, who worked with an unnamed ‘nominee’ and sent profits back to Cope. Gepco CEO Peter Voutsas is alleged to have made materially misleading statements about the company; CFO Trish Malone allegedly helped coordinate illegal stock issuances; chief creative officer Ronald Loshin allegedly failed to make required regulatory filings and allowed de Maison to use a brokerage account in Loshin’s name. The SEC says that Kieran Kuhn used his company Small Cap Resource Corp on the ‘pump’ side of things, inflating Gepco’s stock price.

The SEC says that it is also charging several companies in relation to the pump-and-dump scheme, but hasn’t named them in today’s press release, and that the US Attorney’s Office for the Northern District of Ohio and the Cleveland Division of the Federal Bureau of Investigation have also announced criminal charges against de Maison in parallel with the SEC action.