Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and John V. Gillies, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announced the conviction of Douglas Newton, 66, president and CEO of Real American Brands (RLAB) and Billy Martin’s USA. On May 9, 2012, a federal jury convicted Newton of two counts of mail fraud, in violation of 18 U.S.C. § 1341; four counts of securities fraud, in violation of 15 U.S.C. § 78j(b) and 78ff(a); and one count of conspiring to commit securities fraud, in violation of 18 U.S.C. § 371.
Sentencing is scheduled for August 29, 2012 before U.S. District Court Judge Marcia Cooke. At sentencing, Newton faces a possible maximum statutory sentence of up to 20 years for each of the mail and securities fraud charges and up to five years for the conspiracy to commit securities fraud count.
According to evidence presented during the trial, Newton operated Billy Martin’s USA, a retail company that was delinquent with its lease payments at the Trump Plaza in New York City. In need of funding, Newton turned to a cooperating defendant who arranged a meeting with an undercover FBI agent. Newton attended a meeting in Broward County, Florida, where he agreed on video to bribe a pension fund manager to invest the pension fund investors’ money in Real American Brands. In addition, to hide the illegal bribes, the defendant entered into a fraudulent consulting agreement and sent fictitious e-mails to the undercover FBI agent. In total, Newton paid $12,000 in bribes to the purported pension fund and received a total of $40,000 from the fund. The defendant used the money to pay for his golf club, home owner fees, and his utilities.
According to the trial evidence, after the undercover FBI agent informed Newton that the pension fund would no longer invest in Real American Brands, Newton proposed that the pension fund invest in U.S. Farms, another penny stock that was controlled by a friend of Douglas Newton. The CEO of U.S. Farms, Yan Skwara, testified at trial that Newton explained the illegal plan to him and admitted that he also agreed to pay $12,000 in bribes to the pension fund manager. On April 20, 2012, Yan Skwara pled guilty to one count of conspiring to commit securities fraud. Sentencing is scheduled before Judge Cooke for July 3, 2012.
************************************************************************
Report Securities Fraud by Calling 1-888-482-6825 or by visiting
www.reportsecuritiesfraud.net
No comments:
Post a Comment