Donald A. Milne III, Securities Fraud, New Jersey 2022

TRENTON, N.J. – A New York man was sentenced to 56 months in prison for a scheme to defraud investors of over $3.5 million through a securities offering fraud, U.S. Attorney Philip R. Sellinger announced.

March 31, 2022, Donald A. Milne III, 57, of Massapequa, New York, was sentenced to prison after previously pleading guilty to one count of securities fraud. Milne was the founder, president, and chief executive officer of Instaprin Pharmaceuticals Inc. and SPI Acquisition Corp.

According to documents filed in this case and statements made in court, Milne founded Instaprin in 2012 for the stated purpose of developing a fast-acting form of powdered aspirin that could instantly stop heart attacks and strokes. However, from as early as 2013 and through 2018, Milne executed a scheme to defraud dozens of investors in Instaprin and SPI securities through multiple and ongoing material misrepresentations. Through at least four separate unregistered securities offerings, Milne received more than $4 million in investment proceeds from victim investors across the country.

Milne misrepresented to victim investors the manner in which he and Instaprin/SPI would maintain and use the funds raised through Instaprin securities offerings. He falsely represented in the offering materials that he had assembled “a very strong world renowned board of directors and medical advisory board” that included industry leaders in fields of science and finance. Milne also misrepresented to investors that specific individuals had joined Instaprin as directors, advisors, and/or shareholders of Instaprin.

Milne misappropriated a substantial majority of the investors’ funds to pay out distributions to other investors in a Ponzi-scheme fashion; pay for Milne’s personal expenses, including a Caribbean vacation, boating expenses, divorce payments, clothing, and spa treatments; and to sustain and operate Island Raceway & Hobby Inc., a toy race car business that Milne separately owned.

In addition to the prison term, U.S. District Judge Michael A. Shipp sentenced Milne to three years of supervised release. The Securities and Exchange Commission previously filed a civil complaint against Milne and Instaprin, resulting in a permanent injunction and full disgorgement of funds. Milne is currently serving his 56-month prison sentence for securities fraud in New Jersey.

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