Secret Owner Of Offshore Brokerage Firm Arrested For Alleged $300 Million Securities Fraud
(Newsroom America) — Gregg R. Mulholland, a dual U.S. and Canadian citizen, has been arrested at Phoenix International Airport during a layover of his flight from Canada to Mexico on charges of securities fraud conspiracy and money laundering conspiracy for fraudulently manipulating the stocks of numerous U.S. publicly-traded companies and then laundering approximately $300 million in profits through at least five offshore law firms.
Mulholland was the secret owner of Legacy Global Markets S.A. (Legacy), an offshore broker-dealer and investment management company based in Panama City, Panama and Belize City, Belize, which was indicted in September 2014.
The defendant’s initial appearance for removal proceedings to the Eastern District of New York is scheduled for tomorrow.
According to the complaint unsealed this morning in Brooklyn federal court, between 2010 and 2014, Mulholland controlled a group of individuals (the Mulholland Group) who together devised three interrelated schemes to: (a) induce U.S. investors to purchase stock in various thinly-traded U.S. public companies through fraudulent promotion of the stock, concealment of their ownership interests in the companies, and fraudulent manipulation of artificial price movements and trading volume in the stocks of those companies; (b) circumvent the IRS’s reporting requirements under the Foreign Account Tax Compliance Act (FATCA); and (c) launder the fraudulent proceeds from the stock manipulation schemes to and from the United States through five offshore law firms.
Through this scheme, the Mulholland Group laundered approximately $300 million in fraudulent proceeds.
To facilitate these interrelated schemes, the complaint charges that the Mulholland Group used shell companies in Belize and Nevis, West Indies, which had nominees at the helm.
This structure was designed to conceal the Mulholland Group’s ownership interest in the stock of U.S. public companies, in violation of U.S. securities laws, and enabled the Mulholland Group to engage in numerous “pump and dump” schemes.
This structure enabled the Mulholland Group to manipulate the stock of Cynk Technology Corp, which traded on the U.S. OTC markets under the ticker symbol CYNK. Using aliases such as “Stamps” and “Charlie Wolf,” Mulholland was intercepted on a court-authorized wiretap in May 15, 2014, admitting to his ownership of “all the free trading” or unrestricted shares of CYNK.
Prior to this May 15, 2014 conversation between Mulholland and his trader at Legacy, there had been no trading in CYNK stock for 24 trading days.
Over the next two months, the stock of CYNK rose from $0.06 per share to $13.90 per share, a more than $4 billion stock market valuation for a company that had no revenue and no assets.
Mulholland used the services of a U.S.-based lawyer to launder the $300 million generated through his stock manipulation of CYNK and other U.S. companies—directing the fraud proceeds to five law firm accounts and transmitting them back to members of the Mulholland Group and its co-conspirators. These concealment schemes enabled Mulholland to evade reporting requirements to the IRS.
If convicted, Mulholland faces a maximum sentence of 20 years’ imprisonment.