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Defendants Charged in Multimillion-Dollar Securities Fraud Scheme
Two California men, Kalistratos ‘Kelly’ Kabilafkas, 48, of Moorpark, and Jack E. Daniels, 74, of Agoura Hills, have been charged with conspiring to defraud investors in a multi-year securities fraud scheme. According to court documents, the defendants allegedly conspired to secretly acquire the freely tradeable shares of a publicly traded shell company that they subsequently rebranded as Airborne Wireless Network (stock ticker ABWN).
Kabilafkas allegedly misappropriated a $474,500 sham charitable donation and used the funds to secretly buy the shell company’s stock. Following the acquisition, Daniels, who was Airborne’s president and sole director, allegedly filed false reports with the Securities and Exchange Commission to conceal from investors that Kabilafkas secretly held all of Airborne’s stock.
Without disclosing Kabilafkas’s acquisition of Airborne’s shares, Kabilafkas and Daniels allegedly used investors’ funds to orchestrate a multimillion-dollar advertising campaign designed to inflate Airborne’s stock price. During the advertising campaign, Airborne’s share price increased significantly for short periods of time, and Kabilafkas allegedly capitalized on the stock price spikes to sell millions of shares of Airborne stock and reap millions of dollars in ill-gotten gains.
Kabilafkas and Daniels are charged with one count of conspiracy to commit securities fraud and one count of securities fraud. If convicted, Kabilafkas and Daniels each face a maximum penalty of five years in prison for conspiracy and 20 years in prison for securities fraud.
The case is being investigated by the USPIS, the FBI, and IRS-CI. Trial Attorneys Theodore M. Kneller and Matt Kahn of the Criminal Division’s Fraud Section and Assistant U.S. Attorney James Hughes for the Central District of California are prosecuting the case.
If you believe you are a victim in this case, please contact the Fraud Section’s Victim Witness Unit toll-free at (888) 549-3945 or by email at victimassistance.fraud@usdoj.gov.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Key Facts
- State: California
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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