Newark, N.J. – Shaun Greenwald, a 40-year-old accountant from Cedarhurst, New York, pleaded guilty to his role in a long-running market manipulation scheme that netted millions in illegal profits between 2014 and 2016.
According to documents filed in this case and statements made in court, Greenwald conspired with Joseph Taub, 38, of Clifton, New Jersey, and others to manipulate securities prices of numerous public companies by coordinating trading in dozens of brokerage accounts that they secretly controlled.
The scheme involved creating ‘straw accounts’ held in the names of individuals who neither controlled the accounts nor traded the securities held in the accounts. Taub funded many of these accounts and used the account holders to conceal the scheme from regulators and law enforcement.
The fraudulent trades typically involved two types of straw accounts. First, a ‘Winner Account’ purchased a large block of shares in a particular security. Next, a ‘Loser Account’ placed multiple small orders in the same security to create upward pressure on the stock price. Once the price of the security moved higher due to the Loser Account’s manipulative orders, the conspirators sold their large position in the Winner Account and the shares from any executed trades in the Loser Account.
Greenwald admitted that he performed accounting services for the conspiracy, including calculating the taxes on profits made from the straw accounts. Taxes were paid at the straw account holders’ tax rates, which were typically lower than Taub’s rates, even though the account holders – per their agreements with Taub – were only getting a fraction of the profits.
Greenwald pleaded guilty to one count of securities fraud conspiracy and one count of tax fraud conspiracy. Each count is punishable by a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for June 5, 2018.
Greenwald’s defense counsel is Marc Agnifilo Esq. and Joshua Kirshn. The government is represented by Assistant U.S. Attorneys Daniel Shapiro and Zach Intrater of the U.S. Attorney’s Office Economic Crimes Unit in Newark; and Assistant U.S. Attorneys Sarah Devlin and Barbara Ward, Acting Chief of the office’s Asset Forfeiture and Money Laundering Unit.
Key Facts
- State: New Jersey
- Category: White Collar Crime
- Source: DOJ Press Release â†â€â€
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