A Florida resident has pleaded guilty to conspiracy and tax offenses stemming from a stock ‘pump and dump’ scheme that left investors with millions of dollars in losses.
Damian Delgado, also known as ‘Michael Neumann,’ 44, of Orlando, Florida, waived his right to be indicted and pleaded guilty on July 24, 2017, before U.S. District Judge Jeffrey A. Meyer in New Haven to conspiracy and tax offenses.
According to court documents and statements made in court, between approximately 2009 and July 2016, Delgado conspired with others, including Christian Meissen and William Lieberman, to defraud investors through a stock ‘pump and dump’ scheme.
Delgado and his co-conspirators induced investors to purchase securities by making false and misleading representations in calls, emails and press releases concerning the securities and the issuing companies, thereby causing the price of those securities to become falsely inflated.
The issuing companies, which were essentially shell companies with virtually no legitimate business activities, included Terra Energy Resources Ltd. (stock symbol ‘TRRE’); Mammoth Energy Group, Inc. (stock symbol ‘MMTE’), which later became Strategic Asset Leasing Inc. (stock symbol ‘LEAS’); Trilliant Exploration Corporation (stock symbol ‘TTXP’); Hermes Jets, Inc. (stock symbol ‘HRMJ’), which later became Continental Beverage Brands Corporation (stock symbol ‘CBBB’); Dolat Ventures, Inc. (stock symbol ‘DOLV’), and Fox Petroleum, Inc. (stock symbol ‘FXPT’).
Delgado used pseudonyms in his communications with investors in order to conceal his prior felony convictions and his permanent bar by the Securities and Exchange Commission from participating in any offering of penny stocks.
Delgado received approximately 25 percent of all money that he induced individuals to invest. His personal gain from the scheme totaled $346,652.18. Delgado disguised the income by having the funds flow through the trust accounts of various attorneys, including Corey Brinson in Connecticut, to bank accounts in the name of Delgado’s wife, his stepdaughter and various shell entities he and his wife controlled.
Delgado’s failure to pay taxes on this income resulted in a loss of $54,080 to Internal Revenue Service.
Delgado pleaded guilty to one count of conspiracy to commit mail and wire fraud, which carries a maximum term of imprisonment of 20 years, and one count of tax evasion, which carries a maximum term of imprisonment of five years.
Delgado is scheduled to be sentenced on August 30, 2017. At sentencing, Delgado will be ordered to pay restitution to his victims, as well as back taxes, interest and penalties to the Internal Revenue Service.
This ongoing investigation is being conducted by the Federal Bureau of Investigation, Internal Revenue Service – Criminal Investigation Division and U.S. Postal Inspection Service, with assistance from the Connecticut Department of Banking and the Hartford Police Department.
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- Diane Dalmy, Securities Fraud Conspiracy, Colorado 2016 · Florida
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- Michael Kmec, Wire Fraud, Connecticut 2018 · Florida
Key Facts
- State: Connecticut
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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