A face mask pedestrian looks at a smartphone as he walks past the New York Stock Exchange (NYSE) in New York on Monday, July 20, 2020.
Michael Nagel | Bloomberg | Getty Images
A Minnesota general contractor pleaded guilty Thursday to hijacking dormant mailbox companies and then selling their shares on the over-the-counter market to ignorant investors.
Mark Miller is the second person to admit to blame for the cheeky scam that ran from 2017 to 2019 and involved the fraudulent acquisition of at least four publicly traded companies that had no effective business and had failed to file required regulatory filings for some time.
Miller’s co-defendant, Christopher James Rajkaran, pleaded guilty to a single charge of conspiracy to commit securities fraud last week in Minneapolis District Court.
Miller pleaded guilty to the same charges before that court. Like Rajkaran, if later convicted, he will discharge the 14 other charges on which he was charged, according to an agreement with the federal prosecutor’s office.
The 44-year-old Müller is free on bail. But Rajkaran, a 36-year-old who lives in Queens, New York, is being held without bail on risk of escape because of his ties to Guyana.
A third defendant, Saied Jaberian, 59, of Hopkins, Minnesota, pleaded not guilty on charges of conspiracy, securities fraud, and wire transfer fraud and is awaiting trial.
As part of his plea, Miller agreed to forfeit $ 38,000 in illicit income.
Federal sentencing guidelines state that he will receive a prison term of between 30 and 37 months and a fine of between $ 10,000 and $ 100,000.
But Judge David Doty will determine Miller’s actual sentence upon conviction.
During his pre-plea hearing, Miller provided brief replies acknowledging his understanding of the plea agreement and a description of his criminal acts detailed by a prosecutor.
“I owe the summary you went through,” Miller told the prosecutor.
The three defendants were charged in June with a plot to use letters of resignation, allegedly from others, to take control of four mailbox companies – Digitiliti, Encompass Holdings, Bell Buckle Holdings, and Utilicraft Aerospace Industries.
Miller and Jaberian, as well as an unidentified person related to Miller, became the nominal CEOs and presidents of the target companies, according to prosecutors.
Miller admitted using the Securities and Exchange Commission’s public filing system, EDGAR, and fake news releases to drive these companies’ stock prices up by capturing new business opportunities when, in reality, the companies had no significant business or income.
Miller admitted that he and his co-defendants bought millions of shares in the companies, in many cases for far less than a dime a share, and then sold them over-the-counter for many times the price they paid. Prosecutors said the trio made hundreds of thousands of dollars in profits from the program.
When he was indicted, Miller was involved in obtaining control of a penny stock company in Florida, New World Gold Corp. Miller filed with the SEC.
Miller voluntarily dropped a lawsuit he filed in Florida as part of his efforts to acquire New World Gold less than two weeks after CNBC reported its stake in the company.
After facing criminal charges this summer, Miller resigned as a member of the Breezy Point, Minn town council.