The United States Attorney’s Office, Eastern District of New York filed criminal charges against Gregg R. Mulholland, who was arrested at te Phoenix International Airport during a layover of his flight from Canada to Mexico earlier today.
The U.S. Attorney’s Office accused Mulholland of securities fraud conspiracy and money laundering conspiracy for fraudulently manipulating the stocks of U.S. numerous publicly-traded companies.
According to the U.S. Attorney’s Office Mulholland holds dual U.S. and Canada citizenship. He is the secret owner of Legacy Global Markets, an offshore brokerage dealer and investment management firm base in Panama City and Belize.
Kelly T. Currie, Acting U.S. Attorney for the Easter District of New York said, “Mulholland used an elaborate offshore corporate structure built on lies and deceit to defraud U.S. investors in publicly-traded companies and profited to the tune of $300 million. He concealed his leadership role in this fraudulent network, which included stock promoters, lawyers, and broker-dealers, by using aliases and sham companies, and fled the United States when his secretly-owned brokerage firm was indicted last summer.”
Pump and dump scheme on Cynk Technology stock
The U.S. Attorney’s Office said Mulholland controlled a group of individuals who practiced three interrelated schemes and used shell companies in Belize and Nevis, West Indies to conceal their stockholdings in U.S. public companies. The structures allowed the group to engage in various “pump and dump” schemes including Cynk Technology.
Authorities caught Mulholland’s scheme through a court-authorized wiretap on May 15,201. He admitted his ownership of all the free trading or unrestricted shares of Cynk Technology.
Prior to May 15, no trading on the shares of Cynk Technology occurred for 24 bays based on the conversation of Mulholland and his trader at Legacy. The stock surged from $0.06 per share to as much as $13.90 per share over the next two months.
Cynk Technology, supposedly a social network operator, has no assets and revenue. Its market valuation suddenly reached more than $4 billion following Mulholland’s alleged stock manipulation. He profited $300 million from his illegal trading activities and used a U.S.-based lawyer to launder the money.
SEC filed parallel action
The Securities and Exchange Commission (SEC) also filed parallel charges against Mulholland, who also secretly accumulated at least 84% of the issued and outstanding shares of Vision Plasma Systems. He profited $21 million manipulating the stock.
“Mulholland’s intricate web of offshore entities failed to hide his alleged illicit sales. We are committed to holding accountable those who abuse the microcap markets, regardless of the elaborate steps they take to conceal their misconduct,” said Stephen L. Cohen, Associate Director of the SEC’s Division of Enforcement.