Two California Men Indicted in $474,500 ‘Pump-and-Dump’ Securities Scheme

LOS ANGELES – In a brazen attempt to swindle investors out of millions, a Ventura County man and a L.A. County man have been charged with conspiracy and securities fraud in a multimillion-dollar ‘pump-and-dump’ scheme.

Kalistratos ‘Kelly’ Kabilafkas, 48, of Moorpark, and Jack Edward Daniels, 74, of Agoura Hills, allegedly conspired to defraud investors in a multi-year scheme involving the acquisition and sale of Airborne Wireless Network (stock ticker: ABWN) securities.

According to the indictment, Kabilafkas and Daniels conspired to secretly acquire the freely tradeable shares of a publicly traded shell company that they subsequently rebranded as Airborne. To acquire the company, Kabilafkas allegedly misappropriated a $474,500 sham charitable donation and used the funds to secretly buy the shell company’s stock.

Following the acquisition, 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’ arraignment is scheduled for this afternoon in United States District Court in downtown Los Angeles. Daniels’ arraignment is scheduled for May 3 in U.S. District Court in downtown Los Angeles.

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.

An indictment is merely an allegation, and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

The United States Postal Inspection Service, the FBI, and IRS Criminal Investigation are investigating this matter.

Assistant United States Attorney James C. Hughes of the Major Frauds Section and Trial Attorneys Theodore M. Kneller and Matt Kahn of the Justice Department’s Criminal Division’s Fraud Section are prosecuting this 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.

To learn more about victims’ rights, please visit www.justice.gov/criminal/criminal-vns/victim-rights-derechos-de-las-v-ctimas.