U.S. jury convicts two men for $95 million penny stock fraud

By Nate Raymond
NEW YORK, Nov 10 (Reuters) - Two men from California and
Arizona have been convicted for their roles in what U.S.
prosecutors say was a $95 million pump-and-dump scheme that
prompted one of the largest international penny stock
investigations ever, prosecutors said on Tuesday.
Gary Kershner, an Arizona business owner, and Songkram
Sahachaisere, a California stock promoter, were found guilty
late Monday by a federal jury in Brooklyn, New York, on charges
including securities and wire fraud, prosecutors said.
Their convictions came two years after prosecutors first
announced charges against Kershner, Sahachaisere and seven other
defendants, including Sandy Winick, who authorities said was the
scheme's mastermind.
All the other defendants earlier pleaded guilty, including
Winick, who pleaded guilty to conspiring to commit wire fraud in
connection with a related scheme to dupe investors into paying
fees for nonexistent services. urn:newsml:reuters.com:*:nL2N0ZX222
"Through lies and deceit, the defendants took advantage of
the investing public and sold them worthless stock of shell
companies that were propped up by false press releases,"
Brooklyn U.S. Attorney Robert Capers said in a statement.
Joel Stein, a lawyer for Sahachaisere, 45, said he planned
to appeal. A lawyer for Kershner, 75, did not respond
immediately to requests for comment.
The case followed one of the largest global penny stock
probes ever by the Federal Bureau of Investigation, drawing in
authorities from Canada, England, Thailand and China.
Prosecutors have said the various schemes Winick
masterminded victimized investors in about 35 countries.
Prosecutors said Kershner, Sahachaisere, Winick and others
engaged in a scheme to fraudulently inflate the price of penny
stocks and then dumped billions of shares on victim investors
internationally.
Kershner was responsible for drafting false press releases,
while Sahachaisere, who owned a public relations firm called
Investsource Inc, was responsible for promoting the worthless
companies, prosecutors said.
Both men face sentences of up to 20 years in prison, Capers'
office said.
The case is U.S. v. Kershner, U.S. District Court, Eastern
District of New York, No. 13-cr-00452.