Three men involved in a Kennesaw-based stock pump-and-dump scam were sentenced to prison today and ordered to repay over $44 million in restitution to more than 5,000 investor victims.
The 43-year-old founder and CEO of Conversion Solutions Holdings Corp, Rufus Paul Harris of Oklahoma City, OK, was convicted in U.S. District Court in May on eight counts of securities fraud, wire fraud, conspiracy and false certification of a financial statement.
Harris before his trial concluded but was caught five days later.
The company's co-founder, 48-year-old Benjamin Stanley of Kennesaw, was sentenced to 16 years in prison. Former chief financial officer, 50-year-old Darryl Horton of Okemos, MI, was sentenced to four and a half years in prison after pleading guilty to conspiracy.
“These significant sentences reflect the seriousness of the massive fraud these defendants committed against numerous victims who invested in the defendants’ company," U.S. Attorney Sally Yates said in the release.
"By issuing false information about the company’s assets, the defendants lured victims into purchasing stock at artificially high prices. While the defendants got rich, victims lost millions," Yates said.
According to Yates and information presented in court, the criminal activity began in August 2006. The three men conspired to issue false press releases and financial statements to inflate the stock price while transferring shares to family members, who then sold at the inflated prices.