NJ Lawyer Indicted in Shell Company Scam

SAN FRANCISCO – A New Jersey attorney is facing federal charges for allegedly building and selling empty companies to fuel securities fraud, the Department of Justice announced today. Gregg Jaclin, 47, of Princeton Junction, New Jersey, was indicted on multiple counts related to a scheme that prosecutors say spanned at least since March 2008.

According to the indictment, Jaclin, while working at various law firms, conspired with an unnamed accomplice to create “shell companies” – businesses with no real operations. These shells were then falsely presented to the Securities and Exchange Commission (SEC) as legitimate enterprises, complete with fabricated ownership and control details. The purpose? To sell them to others willing to use them for illicit activities, including manipulating the stock market.

The scheme involved recruiting “sham” CEOs and minority shareholders, offering them payments simply to sign documents and create the illusion of legitimate ownership. These individuals, according to the indictment, had no actual control over the companies. Jaclin and his co-conspirator allegedly fronted money to these shareholders and drafted fraudulent business plans designed to mislead potential buyers. The ultimate goal was to sell the shell companies to those seeking to control a public entity through a “reverse merger.”

Jaclin allegedly prepared and filed numerous fraudulent documents with the SEC, registering shares for public sale and facilitating the reverse mergers. These filings contained misrepresentations and omissions, creating a false impression of the companies’ histories and shareholder base. Later investors, relying on these fabricated SEC filings, were allegedly misled into believing the companies had legitimate operations when, in reality, they were empty vessels.

The indictment further accuses Jaclin of obstructing multiple SEC investigations into his conduct, attempting to cover up the scheme. He’s now charged with conspiracy, in violation of 18 U.S.C. § 371; securities fraud, in violation of 15 U.S.C. §§ 78j(b), 78ff and 17 C.F.R. § 240.10b-5; false filing under the Securities Exchange Act of 1933, in violation of 15 U.S.C. §§ 78j(b) and 78ff; and false filing under the Securities Act of 1933, in violation of 15 U.S.C. §§ 77q.

The case was announced by United States Attorney Brian J. Stretch and Federal Bureau of Investigation Special Agent in Charge John F. Bennett. Details regarding Jaclin’s arraignment and potential trial date have not yet been released. Grimy Times will continue to follow this developing story.

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