3 Min Read
NEW YORK (Reuters) - U.S. authorities on Wednesday announced a new indictment against the former husband of "The Sopranos" star Jamie-Lynn Sigler, and three additional arrests over allegations they ran a $300 million stock manipulation scheme.
Abraxas "A.J." Discala, 44, the chief executive of OmniView Capital Advisors and former husband of Sigler, and six other defendants face charges of fraudulently inflating the prices of thinly-traded penny stocks, selling them to unsuspecting elderly people and other investors, and keeping the profits.
Sigler has not been charged or accused of wrongdoing. She played Tony Soprano's daughter Meadow in "The Sopranos," an HBO television drama.
Federal prosecutors in Brooklyn, New York have said the "pump-and-dump" scheme lasted from Oct. 2012 to July 2014 and involved trades in four publicly-traded companies.
Prosecutors said the defendants' activities boosted the stocks' market valuations to $300 million and caused investor losses of at least $50 million in a single stock, CodeSmart Holdings Inc.
Those arrested on Wednesday include Michael Morris, 63, of Merrick, New York, who was chief executive of New York-based Halcyon Cabot Partners Ltd; Darren Ofsink, 46, a lawyer from Merrick; and Darren Goodrich, 37, a broker from Manhattan Beach, California.
They join Discala and three others facing charges under an amended 11-count indictment alleging securities fraud, wire fraud and conspiracy. Discala is the only individual charged with all 11 counts.
The case was made public in July 2014. Ten people have been charged overall, and three have pleaded guilty.
"Nothing in this new indictment changes the fact that A.J. Discala is a completely innocent man," his lawyer Charles Ross said. "We look forward to demonstrating this in court."
It was not immediately clear whether the new defendants have hired lawyers. The U.S. Securities and Exchange Commission is pursuing related civil charges against some of the defendants, and others who have not been criminally charged.
The Financial Industry Regulatory Authority, a Wall Street regulator, on Oct. 7 said it expelled Halcyon and barred Morris from the securities industry for an alleged scheme to conceal fee kickbacks.
The case is U.S. v. Discala et al, U.S. District Court, Eastern District of New York, No. 14-cr-00399.
Reporting by Jonathan Stempel in New York; Editing by Grant McCool and Alan Crosby