Las Vegas Attorney Indicted in $300 Million Market Manipulation Scheme
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Kyleen Cane, 59, an attorney from Las Vegas, Nevada was indicted with six other persons last week in a federal court in Brooklyn, New York. The ten-count indictment involved orchestration of a $300 million scheme to manipulate the market with the stocks of four publicly-traded companies. The FBI said in a press release that the defendants made profits by selling to elderly investors worthless stock of a company that was supposed to provide medical coding training required by the Affordable Care Act.
The charges against Cane and the other defendants include securities fraud, conspiracy to commit securities fraud, mail fraud, wire fraud and conspiracy to commit securities fraud, and wire fraud in connection with the fraudulent market manipulation of four publicly traded companies. The involved companies include CodeSmart, Cubed Inc., StarStream Entertainment Inc., and The Staffing Group, Ltd.
Besides seizing the residence of one of the accused, the government also seized a dozen bank and brokerage accounts containing illegal earnings.
The indictment was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York and George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI).
Lynch said about the defendants: "They They took companies with essentially no assets or activity and deceived the market into believing they were worth hundreds of millions of dollars through a dizzying round of insider and unauthorized trades. When the defendants stopped their criminal game of musical shares it was the unsuspecting investors who were left holding the bag. The defendants abused their positions of trust and preyed upon unsuspecting and elderly investors, oftentimes placing worthless stocks in their retirement accounts, to perpetrate this far-reaching fraud."
According to court documents, the price and volume of the stocks of concerned companies was carried out by using an escrow account maintained by Cane. The direct involvement of the attorney in the scheme was also revealed by wiretapped conversations with co-conspirators.
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