Gentleman billed in securities fraud tied to Florida shell firm

A Minnesota male criminally charged this month with securities fraud in a plan to hijack dormant shell providers also may possibly have just lately seized control of a Florida penny-stock organization, or at minimum experimented with to, court docket filings suggest.

Federal prosecutors and the Securities and Exchange Commission in independent prison and civil steps filed in Minnesota federal court this month accuse Mark Miller of working with bogus paperwork to just take about inactive shell firms and falsely inflate their inventory selling prices, just before selling tens of millions of shares for gain.

Miller, a 43-yr-aged standard contractor, is a resident of Breezy Stage, Minnesota, the place he had been a Republican member of metropolis council right up until resigning times right after his indictment.

In accordance to prosecutors, Miller, his felony scenario co-defendant Saied Jaberian and an unidentified relative of Miller actually turned the nominal CEOs and presidents of the businesses targeted in the alleged fraud.

Civil court docket paperwork submitted in Florida beginning in February exhibit a Minnesota guy with the exact identify, Mark Miller, engaged in attempts to get in excess of a further dormant shell corporation, New Environment Gold Corp.

New Earth Gold, which purports to be in the company of mining gold ore, is not just one of 7 corporations identified as targets of Miller’s purported plan in the federal criminal case or in the civil SEC circumstance, which are pending in Minnesota federal court.

But Florida courtroom filings, press releases and social media action surrounding New Entire world Gold mirror allegations in opposition to Miller and his two co-defendants in the “pump and dump” scheme described in Minnesota court docket by federal prosecutors and securities regulators.

New World Gold’s shares have enhanced in each selling price and investing volume in the earlier several months, at any time since a person named Mark Miller submitted the steps in Florida court docket in search of to command the corporation.

A day just after CNBC broke the news of the legal indictment against Miller on June 18, New Entire world Gold issued a assertion on Twitter professing that “Mark Miller” is not affiliated with the company.

New Entire world Gold did not say that the “Mark Miller” who was connected to that business in court filings is a various Mark Miller from the one who was indicted in Minnesota.

A amount of people who comply with the business on inventory discussion boards pointed out that the organization also did not make clear why it would disclaim a connection to Mark Miller if that person was not the personal criminally billed in Minnesota.

Robert Lengeling, Miller’s legal protection lawyer in Minnesota, declined to remark, and his customer did not reply to CNBC’s requests for remark.

Federal prosecutors in Minnesota say Miller specific at minimum 4 shell corporations in the scheme that is the issue of the indictment versus him and his co-defendants in the felony scenario, Jaberian and Christopher James Rajkaran.

That indictment stated the males allegedly utilised fake resignation letters from officials of the providers to seize control of the dormant corporations.

They then issued false or misleading statements via push releases and social media, as properly as the SEC’s have EDGAR public filing method, to declare the firms had beautiful new business enterprise possibilities, in accordance to the charges.

Miller and his alleged co-conspirators acquired thousands and thousands of shares of these corporations, normally for fewer than a penny, then bought those people shares right after pumping up the inventory price tag with their fraudulent claims, the indictment explained.

Prosecutors believe Miller and his associates produced hundreds of countless numbers of pounds in illicit gains from the alleged plan, a spokeswoman for the U.S. Attorney’s Office in Minnesota instructed CNBC.

The firms have been recognized in the indictment as Digitiliti, Encompass Holdings, Bell Buckle Holdings and Utilicraft Aerospace Industries.

The SEC, in its civil lawsuit submitted June 18 towards Miller by itself, discovered three further penny-inventory businesses also considered to be similarly targeted by Miller, past the 4 discovered in the legal case. Those people three corporations are Bebida Beverage Enterprise, Simulated Atmosphere Ideas and Strategic Asset Leasing.

All 7 businesses, like New World Gold, experienced been inactive prior to Miller got concerned with them, court docket filings say.

The Florida Division of Corporations databases indicated that New Earth Gold was reinstated on that database on June 4, soon after owning been dormant for much more than 5 years.

The firm’s shares trade publicly on the more than-the-counter market. New Environment Gold is detailed by OTC Markets Team on its “Pink” platform, with a “No Information and facts” warning. The “firm may well not be producing materials data publicly available,” that warning suggests.

The enterprise has no document of any SEC filings, which include a company’s quarterly and once-a-year economic statements, improvements in govt positions, and other files normally made use of by industry experts and traders to make informed choices about whether or not to obtain or sell shares.

New Earth Gold’s reappearance on the Florida state company database arrived virtually four months just after an individual determining himself as a Minnesota resident named Mark Miller submitted a lawsuit in Florida’s Palm Seashore County courtroom in opposition to New Earth Gold, searching for an get to maintain a shareholder conference.

A Palm Seaside County judge in April granted the motion and purchased a shareholder meeting to be held on May well 27, court information display.

Miller stated in a June 17 court filing that in the course of that shareholder conference, “a movement was made to clear away an current director (who is physically incapacitated) and to have Mr. Miller elected as director.”

The same submitting promises shareholders voted unanimously to elect Miller as director. 

New Environment Gold claimed in a June 11 push launch that it obtained a mining enterprise in Wyoming with access to gold and lithium. Lithium is a material used in batteries for private electronics, as well as for electric powered cars.

A 7 days afterwards, on June 18, a push release claimed New Entire world Gold had recognized residence in Nevada and South Dakota for mining.

The company explained in a push release Friday that it had “formally acquired” a placer declare in South Dakota.

Posts on Twitter, Stocktwits, Reddit and Investors Hub referenced Miller as CEO of New Planet Gold.

“$NWGC electricity hour absolutely still at a get I acquired some additional off this very little dip!! I have rely on in the new CEO Mark Miller,” a single Twitter consumer stated on June 1.

“I feel we get a lithium announcement with $nwgc,” yet another user tweeted on June 3.

“I followed the CEO on twitter Mark Miller … I anticipate him to drop BOMBS tomorrow!!!”

But the business tweeted on June 4 that it appointed Ohio attorney Bob Honigford as its CEO and director.

A search for Honigford in the SEC documents databases returns no final results. He did not react to requests for comment by CNBC.

“So, no Mark Miller….,” a person claimed in a Reddit forum termed NWGCShareholders.

“This is awful information,” an additional user chimed in.

“Mark was the person to get trader focus and reinstatement. Bob really does company in the area,” a distinct consumer reported in the similar thread.

New Planet Gold’s stock price peaked on June 3 at all-around 4 cents.

But by Friday it was buying and selling at significantly less than a penny. That however was far more than 8,000% better than its 52-7 days minimal in December, prior to Miller’s lawsuit.

The 30-day common trading quantity of New Earth Gold shares is additional than 146 million shares altering hands per working day.

Next CNBC’s reporting on Miller’s indictment, New Earth Gold tweeted that Miller was not linked to the firm, even with statements to the contrary in the Palm Seashore County grievance.

“Miller has no command in excess of Corporate action or news releases, and he is NOT concerned with the future expansion of Functions,” New Earth Gold tweeted on June 19.

David Rothstein, the law firm representing Mark Miller in the Palm Beach County court docket lawsuit involving New Entire world Gold, also did not answer to a request for remark.

CNBC could not access New Planet Gold at the e mail address detailed on its push releases.

The SEC did not answer to CNBC’s requests for remark.