Federal prosecutors laid new charges against three people last week including a New York City securities lawyer and two financial advisors widening an ongoing fraud investigation that also involves A.J. Abraxas, the ex-husband of Sopranos star Jamie-Lynn Sigler.
The new charges were laid against Darren Ofsink, a Manhattan attorney and founder of Ofsink LLC; Michael Morris, a registered broker and managing director of Halcyon Cabot Partners,); and Darren Goodrich, a registered broker. Securities fraud, wire fraud, mail fraud and conspiracy to commit securities fraud.
“As alleged, licensed professionals such as Ofsink, Morris, and Goodrich abused their positions of trust and became part of an elaborate scheme designed to defraud the securities markets and the investing public through false and misleading press releases and manipulated trading activity,” stated United States Attorney Robert Capers. “The three were entrusted to be gatekeepers to the securities markets but instead perpetrated one of the largest market manipulation schemes ever, and by doing so, preyed upon unsuspecting and elderly investors.”
The facts of the case revolve around allegations that those charged in the case including A.J. Abraxas, who was charged previously in 2014, manipulated four penny stocks including health-care coding firm CodeSmart Holdings, to the extent that they were valued at $300 million at one point despite having no significant assets.
“The first pump and dump occurred between approximately May 13, 2013 and August 21, 2013. During this period, the defendants manipulated CodeSmart’s stock price by raising it from $1.77 to a high of $6.94 (a 291% increase), before causing it to drop to $2.19 (a 217% decrease), stated the FBI press release. “The second pump and dump occurred between approximately August 21, 2013 and September 20, 2013. During this period, the defendants manipulated CodeSmart’s stock price by raising it from $2.19 to a high of $4.60 (a 104% increase), before causing it drop to $2.13 (a 116% decrease).”
A classic pump and dump.
“Using investment schemes like ‘pump and dump,’ ‘wash trades,’ and ‘match trades,’ the defendants were able to manipulate stock prices to profit themselves while defrauding unsuspecting investors,” stated FBI Assistant Director-in-Charge Rodriguez. “The FBI is committed to investigating and bringing to justice those who prey upon trusting individuals for their own personal gain.”
No charges have been laid against Jamie-Lynn Sigler.