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The charges stem from a FBI investigation that used court-authorized wire taps.
“It’s easy to dismiss financial fraud cases like this as harmless, but there is a real victimization and lives are changed because of it,” said Murang Pak, Acting Special Agent in Charge of FBI Atlanta. “Hopefully the sentencing of these two criminals will give the many people who were defrauded some solace.”
After their convictions in February, U.S. Attorney B.J. Pak said in a statement that Bercoon and Goldstein “made over $2.5 million off the backs of many unwitting investors who bought while the stock price was artificially high due to the defendants’ rigging the market.”
B.J. Pak added on Tuesday: “At the same time they were rigging the stock market, the defendants fleeced dozens of investors in a separate fraud scheme. Today’s sentencing marks a fitting end to the defendants’ long history of cheating investors out of their hard-earned money.”
A third man, Peter P. Veugeler, of Windermere, Florida, previously pleaded guilty to conspiracy to commit securities fraud and wire fraud and testified at trial in the United States Northern District Court of Georgia.
According to a release from the DOJ, from 2009 through 2011, Bercoon and Goldstein “conspired” with Veugeler and others to “manipulate” the market for shares of MedCareers Group, Inc., a publicly traded company also known as MCGI.
The conspiracy concluded in two “pump and dump” schemes carried out in 2010, according to the DOJ. To conduct these schemes, Bercoon and Goldstein arranged for MCGI to issue a series of “misleading” press releases and SEC filings. At the same time, mass emails were sent out touting the stock.
While the price of MCGI and the demand for the stock were both artificially high because of these efforts, the defendants orchestrated a sell-off of their stock to accounts that didn’t carry their name, the DOJ said.
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Around the same time, from May 2009 through June 2010, Bercoon and Goldstein organized a private corporation and took money from dozens of investors, according to the DOJ. The men told investors that their funds would be used to develop an internet search engine named Find.com. Bercoon and Goldstein used the bulk of the money raised from investors for unrelated purposes, such as subsidizing their other business ventures and making payments to themselves and their family members, according to the DOJ.
Search for "Find.com" on the internet now and you'll be taken to a blog that says the search engine is "coming soon."
Bercoon and Goldstein previously appeared in federal court in 2010 after being accused of bilking investors of more than $3 million. In that civil case, the SEC claimed the duo had enticed investors to put money toward a Los Angeles-based television and film company, but then they diverted $875,000 for their own use. A judge ordered them to give that money back and pay fines.
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Leaders say the projects will knock off thousands of hours from daily commute.