Wilshinsky Accused of Million-Dollar Stock Scam

CLEVELAND, OH – A California man is facing federal charges in a brazen stock manipulation scheme that bilked investors out of a hefty sum, authorities announced today. Stephen J. Wilshinsky, 59, of Woodland Hills, California, a former stock broker with Compass Group of Oppenheimer Inc. and Marquis Financial Services of Indiana, Inc., is accused of conspiracy to commit securities fraud, securities laws violations, and wire fraud.

According to a criminal information filed in federal court for the Northern District of Ohio, Wilshinsky and at least three unnamed co-conspirators allegedly perpetrated the fraud between March 13, 2008, and September 2012. The scheme targeted public companies Kensington Leasing, Ltd. and Lenco Mobile, Inc. The indictment details a calculated effort to inflate stock prices through illicit means.

The scheme involved the issuance of millions of shares to themselves at little or no cost, followed by artificial control of stock price and trading volume. This was achieved, in part, by paying undisclosed commissions to brokers – including former colleagues – to funnel client funds into both authorized and unauthorized investments. Crucially, the co-conspirators allegedly concealed their ownership interests in the manipulated companies, masking their control and profit motives.

The endgame? Profiting handsomely. The co-conspirators allegedly sold their shares at artificially inflated prices to Wilshinsky’s clients at Oppenheimer and Marquis. The information states that little to no investment capital actually made its way into the operational funding of Kensington Leasing or Lenco Mobile. Instead, the funds were siphoned off to enrich Wilshinsky and his co-conspirators, a classic pump-and-dump operation.

Wilshinsky personally reaped a substantial reward from the alleged scheme. Authorities claim he received approximately $1.2 million in undisclosed cash commission payments and roughly 500,000 shares of stock. He then allegedly sold or transferred these shares, accumulating more than $1.4 million in cash and stock. Assistant U.S. Attorneys Christos N. Georgalis and Adam Hollingsworth are prosecuting the case, following an investigation by the Federal Bureau of Investigation’s Cleveland Office.

While an information has been filed, it’s important to remember this is not a conviction. Wilshinsky is entitled to a fair trial, where the government bears the burden of proving his guilt beyond a reasonable doubt. Sentencing, if convicted, will be determined by the court based on a review of the specifics of the case, including any prior criminal record and the defendant’s role in the offense. The statutory maximum sentence has not been specified, but will likely be less.