Canadian suspect in Cynk stock fraud surrenders to U.S.

Mon Aug 31, 2015 2:52pm EDT
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By Nate Raymond

NEW YORK Aug 31 (Reuters) - A Canadian citizen has surrendered to U.S. authorities in connection with a $300 million penny-stock manipulation fraud that prosecutors say drove the market value of little-known Cynk Technology Corp past $6 billion.

Philip Kueber, who authorities say lived in California and Belize, is expected to appear in federal court in Brooklyn, New York, on Tuesday after pleading not guilty last week to charges including securities fraud, his lawyer said Monday.

He was charged in a July 31 indictment that added him to a pre-existing case over a massive offshore stock fraud that authorities allege was run by a group controlled by Gregg Mulholland, a U.S.-Canadian citizen arrested in June.

"As soon as he found about it, he made arrangements to surrender, which he did," said Stanley Greenberg, Kueber's lawyer. "We will deal with the legal issues in court."

Kueber was released on Aug. 24 on a $150,000 bond.

Two other men, Mulholland and Robert Bandfield, who authorities say operated a business in Belize that helped clients carry out stock manipulation schemes, are being held pending trial and have pleaded not guilty.

Six other defendants have been charged but have not appeared in U.S. court.

U.S. regulators in July 2014 suspended trading in Cynk, a social media company with no revenue or assets, after its share price soared without explanation to $21.95 from 6 cents in less than a month.   Continued...