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Nevada Man Pleads Guilty to $5 Million Investment Fraud
NEWARK, N.J. – A Nevada man has admitted defrauding investors out of more than $5 million, U.S. Attorney Paul J. Fishman announced.
Lee Vaccaro, 44, of Las Vegas, Nevada, pleaded guilty before U.S. District Judge William J. Martini in Newark federal court to a two-count information charging him with conspiracy to commit securities fraud and securities fraud.
According to documents filed in this case and statements made in court:
Vaccaro was the chief marketing officer and vice president of investor relations for eAgency, a California-based company developing mobile security products. Vaccaro admitted that he and an individual identified as “Conspirator #1” sold investors interests in companies they controlled, and falsely represented to investors that the companies held warrants in eAgency. Warrants are derivative securities that give the holder the right to purchase common stock at a specific price within a certain time frame.
Vaccaro also admitted that he and Conspirator #1 made oral and written misrepresentations concerning the existence, number, validity, and term of eAgency warrants purportedly owned by the investment companies, as well as about the amount of money Conspirator #1 had personally invested in and raised for eAgency, and Conspirator #1’s current position at eAgency.
Beginning in January 2011, the dollar amount of interests Vaccaro and Conspirator #1 sold in the investment companies began to surpass the dollar amount of valid warrants held by the investment companies. Neither Vaccaro nor Conspirator #1 disclosed to investors the risk that their investments would be diluted by the sale of additional interests in the companies.
Vaccaro and Conspirator #1’s actions defrauded investors of more than $5 million. The conspiracy to commit securities fraud count to which Vaccaro pleaded guilty carries a maximum potential penalty of five years in prison and a fine of up to $250,000, or twice the gross gain or loss from the offense. The securities fraud count carries a maximum potential penalty of 20 years in prison and a $5 million fine. Sentencing is scheduled for Sep. 13, 2011.
Key Facts
- State: New Jersey
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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