Recovery of Investment Losses in VGTel
According to Investment News, broker Christopher Cervino of Franklin Lakes, N.J., and Sheik F. Kahn, a registered investment adviser in Las Vegas, NV, have been found guilty of securities fraud by a federal court in New York. As we told you last January, the case involves 100 investors who lost more than $15 million related to VGTel stock.
According to reports, Kahn and Cervino were affiliated with Primary Capital in New York and were barred from the securities industry by the Financial Industry Regulatory Authority Inc. They allegedly inflated the market for VGTel, Inc., a publicly traded over-the-counter company, according to a press release from the office of the U.S. Attorney for the Southern District of New York.
In addition to increasing the stock price from approximately $.25 per share in April 2012 to as much as $1.90, the two also inflated trading volume, which increased their ability to raise private investments in the stock.
VGTel Fraud Scheme
The fraudulent scheme was allegedly conceived and led by Edward Durante, who pleaded guilty in August 2016 to various crimes related to VGTel, including conspiracy, securities fraud, money laundering and perjury.
According to the U.S. Attorney, Durante purportedly made at least two cash payments to Cervino totaling $35,000, in addition to the substantial commissions Cervino received for executing trades in VGTel stock. For her part, Kahn allegedly received more than $400,000 from Durante, including more than $100,000 in payments for liquidating her clients’ investments in annuities so the proceeds could be invested in VGTel shares.
Khan’s clients reportedly lost virtually all the money they invested in those shares, according to the release.
Cervino and Kahn were each convicted of one count of conspiracy to commit securities fraud, one count of securities fraud, one count of conspiracy to commit wire fraud, and one count of wire fraud. In addition, Kahn also was convicted of investment adviser fraud and aggravated identity theft crimes. If the maximum sentences are imposed for all convictions, they each face 20 years in prison.
Recovery of Investment losses
The White Law Group continues to investigate potential claims on behalf of investors swindled in the VGTel scheme.
According to his FINRA Broker Check, Cervino was registered with Primary Capital in New York, NY from 10/30/2014 – 01/07/2016 and prior to that he was registered with COR Clearing LLC in Edison, NJ from 08/07/2013 – 10/29/2014. He has six disclosures listed on his Broker Check and he was permanently barred from the securities industry by FINRA in April 2016.
Sheik Khan was registered with Ameritas Investment Corp. in Murrieta, CA from 05/10/2002 – 12/03/2013, according to her Broker Report.
If you suffered losses investing VGTel and would like to discuss your litigation options, please call The White Law Group at 888-637-5510 for a free consultation.
The White Law Group is a national securities arbitration, securities fraud, and investor protection law firm with offices in Chicago, Illinois and Vero Beach, Florida. The firm represents investors throughout the country in FINRA arbitration claims against their brokerage firm.
For more information on The White Law Group, visit www.whitesecuritieslaw.com.