Canadian Charged in Multi-Million Dollar International Stock Fraud Ring
2/12/2009 United States Department of Justice Press Release:
PHILADELPHIA – Acting United States Attorney Laurie Magid and Special Agent-in-Charge of the FBI Janice K. Fedarcyk today announced that a federal grand jury has returned an indictment1 charging George Georgiou with conspiracy, securities fraud, and wire fraud for his role in an international stock fraud conspiracy that resulted in more than $26 million in actual losses and hundreds of millions of dollars in intended losses. The indictment charges that Georgiou and his co-conspirators sought to manipulate the markets for four stocks publicly traded on the Pink OTC Markets Inc. (commonly known as the "Pink Sheets"), and the OTC bulletin board ("OTCBB"): Neutron Inc., Avicena Group, Inc., Hydrogen Hybrid Technologies Inc., and Northern Ethanol, Inc. Georgiou was a registered investment professional in Canada until 1995 when he was banned from acting as broker.
According to the indictment, Georgiou conspired with others in the United States, Canada, Turks and Caicos, and the Bahamas to manipulate the demand for, and prices of, the four companies' stocks. Georgiou and his conspirators intended to profit from the scheme by (1) selling the stocks when they reached an artificially inflated price; and (2) using the artificially inflated values of the stock as collateral to obtain loans in brokerage accounts often referred to as "margin."
"This fraud attacks the credibility of our financial markets at a time when individual investors have already suffered great losses and when legitimate small companies can ill afford yet another blow to their efforts to raise capital through stock offerings," Magid said. "The crimes charged reached across America and into Canada and the Caribbean. This prosecution shows that we will not be deterred by international borders in our efforts to protect Americans, and the markets upon which they rely, from fraud."
Georgiou and his co-conspirators owned significant amounts of the four companies' stocks. They opened brokerage accounts in various locations including Canada, the Bahamas, and Turks and Caicos in various names which they then used to engage in manipulative trading in the stocks. By trading the stocks among and between the various accounts they controlled, they artificially inflated the prices of the stocks and falsely made it appear that there was an active market for the stocks. Georgiou and his co-conspirators sold their shares at inflated prices for a profit and also used the artificially inflated stocks as collateral to fraudulently obtain margin and other cash loans of at least $26 million from two Bahamian brokerage firms. When Georgiou caused trading losses in these accounts, the Bahamian brokerage firms were left with virtually worthless stocks as collateral. As a result, one of the firms was forced to liquidate its business.
"The defendant in this case engaged in an organized and on-going international scheme to manipulate and artificially inflate stock prices of publicly traded companies," said Fedarcyk, "and in so doing defrauded all of the legitimate market investors who owned shares in these companies. The investment market, and the entire economy, suffers when individuals use deceitful means to unscrupulously cheat the system."
Georgiou was arrested after allegedly agreeing to pay an undercover FBI agent a kickback to bribe brokers to purchase $10 million worth of Northern Ethanol stock in their clients' accounts. The FBI agent was posing as a person who had access to a network of corrupt brokers whom the agent could bribe to buy stock as part of the scheme.
Georgiou is currently on house arrest in the United States pending trial.
INFORMATION REGARDING THE DEFENDANT
NAME ADDRESS AGE
George Georgiou Camp Bell Ville, Ontario, Canada 39
If convicted of all charges, Georgiou faces a statutory maximum of 165 years imprisonment and a $21.25 million fine. He also faces approximately 262-327 months under the advisory federal sentencing guidelines.
The case was investigated by the Federal Bureau of Investigation and the United States Securities and Exchange Commission. It is being prosecuted by Assistant United States Attorneys Derek A. Cohen and Louis D. Lappen.
UNITED STATES ATTORNEY'S OFFICE Contact: PATTY HARTMAN
EASTERN DISTRICT, PENNSYLVANIA Media Contact
Suite 1250, 615 Chestnut Street 215-861-8525
Philadelphia, PA 19106
Filed under FBI Releases, USDOJ by Comment. 
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3:56 pm
Celtic Minerals Ltd.-Update
7/23/2009 4:14:27 PM – Market Wire
CALGARY, ALBERTA, Jul 23, 2009 (Marketwire via COMTEX News Network) —
Celtic Minerals Ltd. (TSX VENTURE:CME) (the "Corporation") previously announced that Kevin Flaherty has resigned as Chief Executive Officer and as a director of the Corporation, effective June 30, 2009. This resignation was at the request of the special committee of the board of directors.
The Corporation announced the formation of the special committee on May 1, 2009. The special committee has determined that, on May 30, 2008, there was an unauthorized and unreported advance of $3,191,075 from the Corporation's bank account to the former Chief Executive Officer of the Corporation (the "former CEO"). Working in cooperation with the former CEO, the special committee has obtained the return of those funds with the possible exception of approximately $50,000 and is seeking more information regarding certain additional transactions. It is possible that further review will disclose other unauthorized transactions in respect of which the former CEO has been queried. The special committee is also reviewing further steps to be taken in respect of the unauthorized advances. Securities regulators are also reviewing these matters and the Corporation is cooperating fully in that regard. As previously announced on May 1, 2009, there were inaccuracies in the two unaudited quarterly financial statements of the Corporation for June 30, 2008 and September 30, 2008. Those inaccuracies arise from the unauthorized transactions that have been discovered. The Corporation again cautions readers and shareholders that the previously filed financial statements for those quarters are not to be relied upon.
The Corporation also announces that, in the first quarter of 2009, it completed a private placement for an aggregate of 4,167,000 units (the "Units") at a unit price of $0.10 (the "Offering"). Each Unit consisted of one common share in the capital of the Corporation (a "Common Share") and one-half of one (1/2) warrant exercisable into an additional Common Share at a price of $0.15 per share and expiring two (2) years from the date of closing. The closing of the Offering occurred in four tranches on each of January 16, 2009, January 29, 2009, February 10, 2009 and March 12, 2009 respectively, for aggregate gross proceeds of $416,700. The Corporation announced its intention to complete the Offering on January 8, 2009, but did not make any announcement of the closing of the Offering at the time of closing.
Because the closings were conducted by the former CEO without consultation of corporate counsel, the Corporation is now undertaking a review of the closing documents related to this private placement. It has been determined that no filings were made under National Instrument 45-106. It also appears that a finder's fee was paid to three registered dealers on at least a portion of the private placement, and finder's warrants to acquire up to 163,940 common shares were also issued in connection with the placement. The Warrants are exercisable at $0.10 per share and expire two years from the closing. The Corporation is reviewing the subscriptions, finder's warrants and other closing documents for completeness and accuracy prior to making any regulatory filings.
The Corporation continues to work to prepare its audited financial statements for the year ended December 31, 2008 and accompanying management discussion and analysis. The year end working papers have been completed and the Corporation's auditors have commenced their work. The Corporation has utilized most of the funds that have been recovered from the unauthorized advances and from the private placement to pay trade creditors related to development work on its properties. Such work included exploration activities covering geological, geochemical and geophysical surveys on the Rambler, Buchans Junction, Kingurutik and Black Duck base metal exploration projects in Newfoundland and Labrador and the Muscocho Lake base metal exploration project in Quebec as well as diamond drilling on the Muscocho and Kingurutik projects. The Corporation currently has on hand approximately $350,000 in unallocated funds.
The board of directors of Celtic has commenced a search for a new Chief Executive Officer and Chief Financial Officer and is reviewing the composition of the board. The Corporation's Calgary office has been relocated to #200, 604 – 1st Street SW, Calgary, Alberta T2P 1M7 and the Corporation's records have been moved to that location under control of the special committee.
Forward Looking Statement
This release and subsequent oral statements made by and on behalf of the Corporation may contain forward-looking statements. Wherever possible, words such as "intends", "expects", "scheduled", "estimates", "anticipates", "believes", and similar expressions or statements that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved, have been used to identify these forward-looking statements. Although the forward-looking statements contained in this release reflect management's current beliefs based upon information currently available to management and based upon what management believes to be reasonable assumptions, the Corporation cannot be certain that actual results will be consistent with these forward-looking statements. A number of factors could cause events and achievements to differ materially from the results expressed or implied in the forward-looking statements. These factors should be considered carefully and prospective investors should not place undue reliance on the forward-looking statements. Forward-looking statements necessarily involve significant known and unknown risks, assumptions and uncertainties that may cause the Corporation's actual results, event, prospects and opportunities to differ materially from those expressed or implied by such forward-looking statements. Although the Corporation has attempted to identify important risks and factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors and risks that cause actions, events or results not to be anticipated, estimated or intended. There can be no assurance that the forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, prospective investors should not place undue reliance on forward-looking statements. Any forward-looking statements are made as of the date of this release, and the Corporation assumes no obligation to update or revise them to reflect new events or circumstances, unless otherwise required by law.
Shares Outstanding: 80,192,676
SOURCE: Celtic Minerals Ltd.
Celtic Minerals Ltd. Barry Greene Vice President (709) 489-6480 (709) 489-7092 (FAX) Email: info@celticminerals.com Website: http://www.celticminerals.com
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1:24 am
you have to investigate tony catalanotto,,from cayman isalands,,he made money with george georgiou,,,check him out,,he has been there for eight years,,how did he make the money,,you tell me,
1:30 am
this guy tony made alot of money from george,,he had many parties etc,,,and he bought many things from the money he made with george
7:15 pm
I heard of this guy from cayman,,isnt he also from toronto originally,,,