Florida Man Charged with Securities Fraud Scheme

Sheldon R. Rose, a 77-year-old resident of Sarasota, Florida, has been charged with securities fraud in connection with a scheme to fraudulently register shell companies and secretly sell stock.

According to court documents, Rose was a stock promoter and recruiter who would inform straw CEOs that they would have no further role with the company and would only be paid when the business was later sold. Rose, along with co-conspirators Steven Sanders, Alvin S. Mirman, Daniel McKelvey, and Jeffrey L. Lamson, would prepare corporate documents for the shell companies, including board meeting minutes, stock certificates and shareholder lists, all of which were false and fraudulent.

The conspirators would submit these documents to the SEC on Form S-1 in order to register securities offerings in the name of the shell companies. Once a company’s registration was effective, the conspirators would recruit individuals to serve as nominee shareholders, making it appear that there was a group of shareholders that were unaffiliated with the company.

Rose faces a maximum statutory sentence of five years in prison and a fine up to $250,000 or double the proceeds of the offense. He was charged by criminal information with one count of conspiracy to commit securities fraud, in violation of 15 U.S.C. §§ 78j(b) and 78ff(a), and 17 C.F.R. § 240.10b-5, all in violation of 18 U.S.C. § 371.

This case is part of an ongoing investigation into a scheme that has resulted in the charging of six defendants. Three of the defendants, Daniel McKelvey, Jeffrey L. Lamson, and Steven Sanders, have previously pled guilty for their participation in the securities fraud conspiracy.

Rose and another defendant, Ian C. Kass, a registered securities representative, were charged in connection with this scheme. Kass, 45, of Ft. Lauderdale, Florida, was also charged with conspiracy to commit securities fraud.

The case is assigned to U.S. District Judge Jose E. Martinez in Miami. The U.S. Securities and Exchange Commission (SEC), Miami Regional Office, and the Federal Bureau of Investigation (FBI), Miami Field Office, are working together to bring those responsible for this scheme to justice.