A Minnesota home contractor was sentenced to a 12 months and someday in federal prison on Thursday for a brazen scheme to hijack dormant publicly traded shell firms after which pump-and-dump their stocks to unwitting buyers.
The contractor, 45-year-old Mark Miller, is the last of three men to be sentenced for the securities fraud scheme, which became public through an indictment filed in June 2021 in U.S. District Court in Minnesota.
Miller’s lawyer asked Judge David Doty to sentence Miller to probation, citing his contracting business — which the Breezy Point man runs together with his wife — the actual fact they’ve teenage children, and what he called a disparity within the punishment of probation meted out to considered one of his co-defendants.
“He’s a family man and a tough employee,” said the defense attorney, Robert Lengeling, of Miller, who has been awaiting sentencing since he pleaded guilty in October 2021.
“It will be an injustice to pluck him out of the community.”
Lengeling told Doty it “felt like we got punched within the gut, quite frankly” when he recently learned prosecutors were asking that Miller spend a 12 months in prison for the penny stock scheme. “It was a little bit of a suprise.”
“My client is here today incredibly terrified of what he’ll do together with his business,” the lawyer.
The one-year sentence, really helpful by prosecutors, was markedly lower than the sentence of 30 to 37 months suggested by federal sentencing guidlines for the charge of conspiracy to commit securities fraud.
“Mr. Miller committed a serious crime,” assistant U.S. Attorney Melinda Williams told the judge.
“I’m not hearing quite a lot of remorse,” the prosecutor added.
Along with his prison term, which Miller is anticipated to begin serving in August, Doty sentenced Miller to 2 years of supervised release after he completes his time locked up.
In giving Miller a day in prison beyond a full 12 months, the judge actually was granting the defendant a kind of break: under federal rules, any defendant who’s sentenced to greater than a 12 months in prison is eligible to be released after 85% of their term is served. Individuals who get a 12 months or less in jail should not eligible for early release.
Miller also faces a requirement for “extra money” from the Securities and Exchange Commission, which has a pending civil grievance against him in reference to the scheme, Lengeling told the judge.
Prosecutors as a part of a plea agreement with Miller dropped mutliple counts of securities fraud and wire fraud that he had been originally charged with.
Miller, along together with his co-defendants Christopher James Rajkaran and Saeid Jaberian, from 2017 through 2019 used bogus resignation letters purportedly written by the officers of multiple shell firms to seize control of a minimum of 4 firms.
The businesses, which had no meaningful business, also did not make required regulatory filings for a while.
The conspirators then used the SEC’s EDGAR public filing system and faux press releases to fraudulently inflate the share prices of the hijacked firms by claiming latest business opportunities, prosecutors said. Miller and Jaberian, in addition to an unidentified person related to Miller, became the nominal CEOs and presidents of the targeted firms, prosecutors say.
The defendants, who had purchased most of the stocks for lower than 1 cent per share, then sold them on the over-the-counter marketplace for over and over what they paid for them. Prosecutors said the boys earned lots of of hundreds of dollars in profits from the scheme.
On the time that he was criminally charged, Miller was involved in an effort to seize control of a Florida penny-stock company, Latest World Gold Corp.
That company had not been identified as considered one of the seven shell-company targets in either the criminal case or a civil lawsuit against Miller filed by the SEC.
Miller voluntarily dropped a suit related to efforts to take over Latest World Gold soon after CNBC reported his involvement with that company.
Rajkaran, a resident of Queens, Latest York, and Guyana, pleaded guilty within the case in 2021. He was sentenced in January 2022 to 18 months in prison. After his release, he was arrested last November and charged with gross misdemeanor driving while intoxicated, in keeping with a federal court filing in April.
Jaberian, also a Minnesota resident, was on the right track to go to trial in his criminal case until last November, when he pleaded guilty. Doty sentenced him on May 10 to 2 years of probation.
During his sentencing on Thursday, Miller’s lawyer told the judge that “my client has great concerns about how much we are going to speak about this case,” referring to his criminal prosecution.
Noting that a CNBC reporter was monitoring the hearing via Zoom, Lengeling said, “There’s a minimum of one media outlet that has taken great interest in Mr. Miller’s case.”
“For some reason, this has been a salacious sort of case for this particular media person and I’m undecided why,” Lengeling said.
“Mr. Miller has made a mistake, and has made amends,” Lengeling said.
The lawyer ended the hearing by asking Doty to seal the transcript of the proceeding for a decade. Doty didn’t immediately rule on that request.