BOSTON – In a brazen scheme to bilk millions from unsuspecting investors, a California businessman has been sentenced to serve time in a federal prison.
Kevin C. Dills, 67, of Carlsbad, Calif., was sentenced by U.S. District Court Judge Richard G. Stearns to time served (approximately five days in prison) and 30 months of home detention. He was also ordered to forfeit $6.12 million. Dills pleaded guilty in January 2024 to one count of securities fraud.
The scheme, which unfolded between October 2020 and July 2021, involved the sale of unrestricted free-trading shares in the company Oncology Pharma, Inc. Dills engaged in a fraudulent scheme to obtain and profit from the sale of these shares, which traded on the over-the-counter securities market under the ticker symbol ONPH.
As part of the scheme, Dills secretly controlled one of the entities that received the shares, using his girlfriend as a proxy. The shares were then sold to two individuals, who deposited them with the Cayman Islands broker Valor Capital. Valor Capital’s close association with co-defendant Joseph A. Padilla, a fellow California businessman, allowed them to manipulate the market and artificially drive up the price of the shares.
Padilla then began dumping the shares to unsuspecting investors, generating tens of millions of dollars in illicit profits. Over $6 million of these profits were transferred to Dills via his entities between March and June 2021.
Acting United States Attorney Joshua S. Levy and Jodi Cohen, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division, announced the sentence today. Assistant United States Attorneys James R. Drabick and Ian J. Stearns of the Securities, Financial & Cyber Fraud Unit prosecuted the case.
Dills’ co-defendant, Joseph A. Padilla, was sentenced in November 2023 to 66 months in prison and one year of supervised release after pleading guilty to securities fraud and other charges.
The sentence serves as a reminder of the consequences of engaging in securities fraud and other financial crimes. The case highlights the need for investors to be vigilant and cautious when dealing with penny stocks and other high-risk investments.
The Federal Bureau of Investigation and the Securities and Exchange Commission will continue to work together to crack down on financial crimes and protect investors.
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Key Facts
- State: Massachusetts
- Agency: DOJ USAO
- Category: White Collar Crime|Fraud & Financial Crimes
- Source: Official Source ↗
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