Ex-ForceField Energy Chairman Faces Stock Scheme Charges
The former chairman of an LED lighting provider was charged by U.S. officials with scheming to boost the company’s share price in part by making secret payments to conspirators through a firm based in Belize.
ForceField Energy Inc.’s Richard St-Julien, who stepped down from his position after his arrest Friday, was charged with securities fraud conspiracy by federal prosecutors in Brooklyn, New York, the government said Monday.
Trading in the alternative-energy company’s stock was halted Monday morning after falling 22 percent at 10:21 a.m. The New York-based company told investors in a regulatory filing Monday that St-Julien, founder and majority shareholder, was arrested and had resigned as chairman.
St-Julien is accused of scheming from August 2012 to this month to manipulate ForceField Energy’s stock price with help from stock promoters, broker dealers and a dermatologist in Boulder, Colorado, who bought shares on his behalf, according to a criminal complaint unsealed in Brooklyn federal court. St-Julien paid individuals who made the trades using a Belize-based firm and bank account, according to the complaint.
St-Julien, 46, was arrested in Florida while preparing to board a plane for Costa Rica, where he lives, and made an initial court appearance in Fort Lauderdale on Monday. He faces a maximum of 25 years in prison if convicted, according to prosecutors.
ForceField Energy, formerly named Sunsi Energies Inc., is publicly traded and listed on the Nasdaq stock market. The company distributes LED commercial lighting and fixtures.
Through his scheme, St-Julien created the appearance of trading volume and genuine interest in ForceField Energy’s stock, driving the price from $4.55 to $7.82 from about January 2014 to this month, prosecutors said.
“St-Julien had a fiduciary responsibility to act in the best interest of ForceField and its shareholders. He did neither,” Diego Rodriguez, Assistant Director-in-Charge of the FBI’s New York Field Office, said in a statement.
Brooklyn U.S. Attorney Loretta Lynch, who has been nominated to replace U.S. Attorney General Eric Holder, said in a statement that St-Julien “engaged in a stock trading scheme that was crafted on lies and deceit.”
St-Julien and ForceField Energy Chief Executive Officer David Natan, the current chairman, didn’t immediately respond to e-mail messages Monday.
The charges follow a probe by Brooklyn federal prosecutors into another alleged stock scheme involving firms based in Belize, described by some investment blogs as a top offshore tax haven.
In that case, prosecutors last year charged Robert Bandfield, a U.S. citizen, with conspiring to commit securities fraud, tax fraud and money laundering through the operation of a $500 million investment scheme using alleged “sham companies” in Belize. Bandfield has pleaded not guilty.
St-Julien’s arrest came the day a lawsuit was filed against him, the company and other executives in Manhattan federal court alleging that ForceField Energy misled investors about operational and compliance policies.
Among other things, the company failed to disclose that reports touting the company’s stock on the investor website SeekingAlpha.com were paid for by the firm, according to the complaint.
The criminal case is U.S. v. St. Julien, U.S. District Court, Eastern District of New York (Brooklyn). The investor case is Atkinson v. ForceField Energy Inc., 1:15-cv-03020, U.S. District Court, Southern District of New York (Manhattan).