Seven people were charged today with operating a fraudulent
pump-and-dump scheme in the stock of a sham company that purported
to provide products and services to fight global warming.
The Securities and Exchange Commission filed the complaint and
says the scheme resulted in more than $7 million in illicit profits
from sales of stock in CO2 Tech Ltd. at artificially inflated
prices. Despite touting impressive business relationships and
anti-global warming technology innovations, CO2 Tech did not have
any significant assets or operations, it adds. The company was
purportedly based in London, and its stock prices were quoted in
the Pink Sheets.
The SEC alleges that the group included stock promoters, traders
and a lawyer who wrote a fraudulent opinion letter. According to
the SEC's complaint filed in U.S. District Court for the Southern
District of Florida, the scheme was perpetrated through Red Sea
Management Ltd., a Costa Rican asset protection company that
laundered millions of dollars in illicit trading proceeds out of
the United States on behalf of its clients. The U.S. Department of
Justice today announced related criminal charges against six of the
According to the SEC's complaint, the fraudulent pump-and-dump
scheme in CO2 Tech stock occurred from late 2006 to April 2007
through the efforts of the following individuals:
* Jonathan R. Curshen, a Sarasota, Fla., resident who founded
and led Red Sea. * David C. Ricci and Ronny Morales Salazar of San
Jose, Costa Rica, who were Red Sea stock traders. * Ariav "Eric"
Weinbaum and Yitzchak Zigdon of Israel, who were Red Sea clients. *
Robert L. Weidenbaum of Coral Gables, Fla., a stock promoter who
operates a company called CLX & Associates. * Michael S. Krome
of Lake Grove, N.Y., a lawyer who allegedly wrote a fraudulent
The SEC's complaint alleges that CO2 Tech falsely touted
business relationships that the company had not formed, including a
relationship with the Boeing Company. In fact, there were no
communications, correspondence or understandings between CO2 Tech
In the related criminal action, charges brought by the Justice
Department's Criminal Division were unsealed against Curshen,
Krome, Salazar, Weidenbaum, Weinbaum, and Zigdon. The defendants
are charged in the Southern District of Florida variously with
conspiracy to commit securities, mail and wire fraud; wire fraud;
mail fraud; violating the securities regulation laws and
obstruction of justice.
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