“Pump and Dump” Stock Fraud Scheme Indictment

“Pump and Dump” Stock Fraud Scheme Indictment

A federal grand jury in Chicago has indicted a former executive of a Silicon Valley video streaming service. He is indicted for allegedly engaging in a “pump and dump” stock fraud scheme. The indicted David Foley served as a director of San Jose, Calif-based Nanotech Entertainment Inc. (“NTEK”). While serving as the director, he allegedly schemed with an investment manager to manipulate purchases and sales of shares in NanoTech Gaming Inc. (“NTGL”)

The “NTGL” is a Las Vegas Nev. based business that formerly operated as a division of NTEK. A ten-count indictment returned Jan. 11, 2021, in U.S. District in Chicago. The 55-year old Foley of Los Gatos, Calif., and 49-year old investment manager Bennie Blankenship of New Carlisle, Ohio are charged with wire fraud and securities fraud. Arraignments are scheduled for Jan. 19, 2021, at 10:00 a.m., before U.S. District Judge Steven C. Seeger.

John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Emmerson Buie, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI announced the indictment. Assistant U.S. Attorney Matthew Getter is representing the government. The indictment alleges that Foley acquired shares in NTGL and fraudulently caused them to be unrestricted.

The indictment states that Blankenship exaggerated the stock’s prospects for success, thus artificially inflated the prices. The indictment states that Foley schemed with others to sell the pumped-up stock to the investing public. The scheme lasted for three years from 2013 to 2016. The indictment states that during a portion of the time period, Foley was incarcerated in California on an unrelated criminal conviction.

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