TERI BUHL's Blog Update. Feds Finally Arrest DiScala’s Microcap Attorney Ofsink

Attorney Ofsink, another co-conspirator in the pump-and-dump scheme with attorney Kyleen E. Cane.
TERI BUHL’s Blog Update.

Cane Connected To Yet Another Pump and Dump Scheme – And This Time, It’s Political

“I’ve never seen a super PAC used to promote a penny stock.”

In the era of super PACs, where an unlimited of money can be spent to campaign for or against political figures and policies, loose regulation and lack of oversight can make it a lucrative enterprise if abused just the right way.

And no one knows how to abuse the system better than Kyleen Cane.

As reported by ProPublica, a publically-traded company called CrossClick Media had been awarded a contract by a super PAC known as, “Voters For Hillary” to run call centers and provide other services for Hillary Clinton’s campaign. CrossClick (XCLK) stock, initially trading at a hundredth of a penny, soared in the OTC markets following the announcement, its price going up as much as twelve-fold. Anyone selling at peaks would’ve made a tidy profit, which indeed happened multiple times.

But as ProPublica investigated deeper into the relationships between CrossClick and Voters For Hillary, they discovered questionable relationships and spending habits (or lack thereof). It turned out that the majority shareholder for CrossClick is married to the chairman of Voters for Hillary, and that the super PAC has not spent one dime supporting Secretary Clinton’s campaign.

What’s interesting is the money loaned to Voters for Hillary. Some of the lenders, contributing sums up to $250,000, were also registered Republicans. Among the lenders was Kyleen Cane herself, who lent $10,700 of her own money.

Billions of CrossClick’s shares were outstanding by mid 2015, its price history resembling a sharp mountain ridge with steep drop-offs, a sure sign of pumping and dumping. Sadly, the names of whoever made a profit from dumping CrossClick’s shares will never be known as they are not public if trades contain less than 10% of total shares or the seller isn’t a senior officer.

But knowing her history, it’s very likely that Cane was one of those profiteers.

TERI BUHL's Blog Update. The Seedy World of Microcap Stock Advisors

TERI BUHL’s Blog Update. Republished here.

UPDATE March 6th 2015: AJ Discala’s trading partner at OmniView Capital has thrown in the towel. Marc E. Wexler who was charged on multiple counts of securities fraud plead guilty to two felony charges on October 15th and agreed to pay a forfeiture bond of $1.4 million. Wexler who lives in Colts Neck New Jersey plead to conspiracy to commit securities fraud and securities fraud in the stock CodeSmart ($ITEN). The DOJ’s original complaint said they believed Wexler had made $2.2 million in manipulative trading of CodeSmart. Sentencing appears to be held in Wexler’s case as it is possible he is turned government witness against his partner AJ Discala. Discala switched criminal lawyers a few months ago hiring New York-based Charles A. Ross. AJ and his fellow co-defendants are still slugging through motions for discovery and fighting the DOJ charges. Ex-SEC enforcement attorney Tom Sporkin who ran the microcap fraud unit is also helping Discala on the case. Sporkin is now a white-collar defense lawyer for Buckley Sandler in Washington D.C. The SEC parallel case was stayed in mid-November, which is typical when the DOJ leads on criminal charges. If convicted Discala faces years in prison. AJ told this reporter he will fight the case to trial.

Original Article Sep 18,2014
The CEO of a merchant bank that helped fund dozens of micro-cap companies claims he is a target of regulatory overreach after he was indicted in late July on ten counts of criminal misconduct for his alleged role in pump and dump stock schemes. Abraxas J. Discala (known as A.J.), CEO of Connecticut-based OmniView Capital Advisors, was arrested while on business in Las Vegas in July after the Justice Department revealed what appeared to the DOJ to be damaging wiretaps labeling him as a ringleader who tried to manipulate the price of penny stocks and mislead investors about financials in public companies. The DOJ used Discala’s status as the ex-husband of an actress to get their arrest splashed across international headlines in a move to show Obama’s task force on financial fraud is finally arresting Wall Streeters. But a look inside the deal documents show the Justice Department doesn’t know who the bad actors really are in this case. This reporter was given exclusive access to deal contracts, executive’s emails, and conducted interviews with some of the players involved in one of the alleged stock frauds called CodeSmart ($ITEN). The case shows a unique look at the backroom deals made to help small entrepreneurial companies raise capital through alternate public offerings and highlights the questionable tactics microcap advisors use to get discounted free trading stock.

Ms. Kyleen Cane Permitted to Travel to Scotland Between August 14-24th, 2015.

"I'm going to drink scotch and play bag pipes! Whoooohooo!!"
“I’m going to drink scotch and play bag pipes! Whoooohooo!!”

In a stunning decision by Honorable Vitaliano, he granted Ms. Cane’s request to travel to Scotland to help her son unpack. Ms. Cane is allowed to renew her passport and the Court temporary increased her bond’s value to $2,000,000. (20150702 Order Modifying Conditions of Release Cane)

The government made many good arguments regarding Ms. Cane’s financial means, with exception of her off-shore assets. Ms. Cane’s own financial reporting reveals that she is worth $20 million including $6 million in outright property and $12 million in other property including her business.

The defendant stated that she owned the following properties, and provided the following estimated values: (1) her primary residence in Las Vegas, NV, with an estimated value of $3 million and a $750,000 mortgage; (2) a residential rental property in Hidden Hills, CA, with an estimated value of $1.5 million which generates $10,000 month in income; (3) a residential rental property on Quail Hollow Drive in Las Vegas, NV, with an estimated value of $800,000 which generates $3,700 month in income; and (4) a residential rental property on Viking Road in Las Vegas, NV, with an estimated value of $250,000 which generates $1,600 month in income. The Viking Road property is currently the only property securing her bond.

In July 2014, the defendant stated she held approximately $1 million in liquid assets, including stocks ($250,000), a bank account ($120,000) and a TD Ameritrade account ($600,000). The defendant also said she owned three vehicles, including a Tesla, a Mercedes, and a Lexus, worth approximately $150,000 in total.

In addition, through various corporate entities, including GSTB LLC, 200 Western LLC, Western LLC and DKM LLC, the defendant reported owning, with others, six residential rental properties plus a couple commercial properties with a total estimated value of approximately $5.5 million, which generates approximately $25,000 a month in income. The defendant did not provide the addresses of the properties owned through these corporate entities, and it is unknown what percentage of these investments belong to the defendant.

Finally, the defendant reported owning “business assets,” including office furniture and equipment, worth approximately $6.5 million. 

The defendant reported earning approximately $25,000 per month income as a lawyer.

The defendant’s main reported liabilities, as of July 2014, included the $750,000 mortgage on her primary residence, and the monthly business expenses for operating her law firm.

Why hasn’t the government seized all this property? $20 million against Ms. Cane’s participation in a $300 million securities fraud scheme? Not even enough to cover the interest. (20150624 Government Response to Cane’s Request to Travel)

Ms. Cane’s attorneys calls the government out flatly that they have no facts to indicate that Ms. Cane is a flight risk.  The government never raises Ms. Cane’s connection to Jan Wallace or Chloe Jardine-Cutler. The government never raises Ms. Cane’s and Mr. Cane’s previous off-shore stock schemes with LOM Securities. The government needs to indict Jan Wallace, Chloe Cutler, Mujit Johal, Amin Lakha, Claire Ambrosia, for conspiracy to commit securities fraud and let Johal and Ambrosia spill their beans to cut a deal. It is through this action the government could harvest enough facts to make a clear case that Ms. Cane is a flight risk. Instead, Ms. Cane is going to travel to Scotland, and whether it is this trip or the next, Ms. Cane is going to flee. It’s only a matter of time. (20150626 Cane’s Response to Government’s Reply 20150626 (corrected copy))

Kyleen Cane’s Partner Brian Clark Is Also A Fraud

CYTTA CORP 8-K Nov 5, 2014

Odd behavior for Brian Clark, from the link:

Email Correspondence from Tad Mailander dated November 9th, 2104 Re Mr. Brian Clark

Mr. Mailander stated in his correspondence “I received the attached letter from Mr. Bryan Clark, Esq. Can you please confirm to me whether or not this lawyer represents Cytta? Your prompt response is appreciated.”  Mr. Mailander also advised that, he had received an earlier phone message from Mr. Clark wherein he identified himself as the attorney for EraStar, Inc. and Ms. Vanessa Luna. 

Upon reviewing the correspondence from Mr. Clark dated November 3rd, 2104 stating, “I write to advise you that we have been retained by Cytta Corp. and to request that you transfer the file to this firm as soon as possible. The file should include all electronically stored materials, including but not limited to correspondence, word processing and spreadsheet files, and all drafts thereof, complete with any metadata.” Cytta advised by Mr. Mailander by letter dated November 9th, 2014 that,

“Mr. Bryan Clark has never represented Cytta Corp. in any capacity.  The statements in his letter to you of November 3rd, 2014 are false.  You are specifically instructed by Cytta not to provide him with the documents and any other materials or matters requested.

Mr. Clark is known to me [Gary Campbell] as the partner of Ms. .Kyleen Cane in the firm of Cane Clark, until her arrest by the FBI on July 17th, 2014.  When Ms. Cane was arrested and charged for her involvement and her firms trust accounts use in a “$50 million dollar stock scam” involving mergers and Public Company disclosure, the EraStar principals suggested Mr. Clark continue as their lawyer.  Cytta rejected that suggestion and you (Tad Mailander) were retained by EraStar, Inc.   Please see news report regarding Kyleen Cane’s arrest and charges attached. We note Mr. Clark has now changed the name of his firm from “Cane Clark,” to simply “Clark” given Ms. Cane’s incarceration.  

Ms. Cane and Mr. Clark were providing legal services to EraStar, Inc. and were jointly the original lawyers chosen by the EraStar principals (Jens, Vanessa, Steffan and Jamison) to represent EraStar and act for them in the merger process. In fact, they prepared a draft merger Agreement which EraStar provided to me and, based upon the representations of the EraStar principals were providing ongoing legal advice to EraStar regarding their corporate actions and filings.

We are very disturbed by Mr. Clark’s letter.  His attempt to pass himself off as Cytta’s lawyer and collect the materials evidencing EraStar’s activities in your and Cytta’s possession is certainly misrepresentation and given his objective perhaps illegal.  

Erik Stephansen and I also received a letter from Mr. Clark describing himself as the Cytta attorney, describing the EraStar principals as the Directors of Cytta, and purporting to call a Director’s Meeting on November 13th, 2014.  He was once again seeking to obtain the very damaging EraStar materials in Cytta’s possession.”

Cytta also advises that pursuant to NRS 78.330 “each director holds office after the expiration of his or her term until a successor is elected and qualified, or until the director resigns or is removed.” The Bylaws of Cytta further provide inter alia that Directors may resign only by “giving written notice to the Board” of his resignation.  Cytta Corp., its Directors and Officers, Gary Campbell, Erik Stephansen, and John Dinovo have never signed or executed written resignations as Directors of Cytta, nor have we taken any steps to change the Officers.  Mr. Mailander confirms he has never received any documentation from Cytta Corp evidencing any changes to the Board or its Officers.

Cytta Corp. and its legal counsel is currently determining what the appropriate legal and/or regulatory disclosure and otherwise action to take, regarding Mr. Clark and possibly Ms. Cane’s actions and involvement in this matter specifically and all other actions of the Defendants.

 

Kyleen E. Cane released on $1,000,000 Bond.

20150702-order-modifying-conditions-of-release-cane

https://goo.gl/maps/vhkobfp5j24NMLXc8
https://goo.gl/maps/vhkobfp5j24NMLXc8

Kyleen Cane released with pre-trial services conditions: $1,000,000, 20140729 Order Setting Conditions of Release and Bond 20140729 Magistrate’s Proceedings 5544 Hoback Glen Rd. Hidden Hills, CA 91302, (702) 595-8005


https://goo.gl/maps/vhkobfp5j24NMLXc8
https://goo.gl/maps/vhkobfp5j24NMLXc8

Kyleen Cane – CNBC Coverage and and the SEC Complaint.

Abraxas-J.-Discala-Marc-E.-Wexler-Matthew-A.-Bell-Craig-L.-Josephberg-and-Ira-Shapiro-Release-No.-LR-23046-July-17-2014

http://www.sec.gov/litigation/litreleases/2014/lr23046.htm

20140717 SEC v Discala, Wexler, Bell, Josephberg, Shapiro Case No CV14-4346 20140729 SEC v Discala Docket 20140717 Coversheet NBC Breaking News Cane Accused of $300 million stock fraud.

Articles Regarding Kyleen Cane’s Indictment/Arrest.

A.J.-Discala-ex-husband-of-Jamie-Lynn-Sigler-arrested-in-300-million-pump-and-dump-stock-scheme-feds-New-York-Daily-News

http://www.reuters.com/article/2014/07/17/usa-crime-stockfraud-sopranos-idUSL2N0PS1GU20140717

http://www.nydailynews.com/new-york/nyc-crime/ex-husband-jamie-lynn-sigler-arrested-alleged-pump-dump-stock-scheme-article-1.1870350

http://www.mysanantonio.com/news/local/article/Broker-indicted-in-300M-stock-manipulation-5629491.php

http://www.ft.com/intl/cms/s/0/44bea4c2-0dc5-11e4-85ab-00144feabdc0.html

Sopranos-stars-ex-husband-others-accused-of-300-mln-stock-fraud-Reuters