3 March 2005 – LAWFUEL – The Law News Network – Marcos Daniel Jiménez, United States Attorney for the Southern District of Florida; Enrique Gutierrez, Inspector in Charge, Miami Division, United States Postal Inspection Service; and Michael S. Clemens, Special Agent in Charge, Federal Bureau of Investigation, announced today that defendant, Gregory Swarn, a former resident of Miami Beach, Florida, together with defendants, Craig Moncrieffe and John Eckhardt, both Broward County residents, pleaded guilty before United States District Court Judge Paul C. Huck in Miami, Florida, on March 2, 2005, to charges relating to a multimillion dollar securities fraud operation that targeted foreign investors by means of various elaborate boiler room-type telephone solicitation schemes.
Swarn and Moncrieffe pleaded guilty to count one (1) of the Superseding Indictment, which charged them with conspiracy to commit wire fraud, in violation of Title 18, United States Code, Section 1349. Defendant Eckhardt pleaded guilty to count twelve (12) of the Superseding Indictment, which charged conspiracy to commit wire fraud in relation to a separate conspiracy. Each defendant faces a maximum statutory term of imprisonment of twenty (20) years and a maximum fine of $250,000. In addition, pursuant to the terms of their plea agreements, each defendant has agreed to recommend that the court impose prison sentences of no less than the following: Swarn – eighty-seven (87) months; Moncrieffe – fifty-one (51) months; and Eckhardt – forty-six (46) months. The defendants’ sentencing hearings are scheduled for May 17, 2005, beginning at 2:00 p.m., before Judge Huck.
Count one (1) of the Superseding Indictment, to which Swarn and Moncrieffe pleaded guilty, alleged that from approximately May of 2002 to February of 2004, they, together with other co-conspirators, conducted the call center portion of the boiler room operation from offices in Miami-Dade County. As further alleged in this count of the Superseding Indictment, the defendants’ scheme involved the making of unsolicited telephone calls to foreign investors whose names had been acquired from various so-called “lead” databases. In these telephone calls, Swarn and Moncrieffe, together with certain co-conspirators, posed as representatives associated with certain purported financial services firms. During these solicitations or “pitches,” the defendants are alleged to have proposed certain enticing stock swap or straight stock purchase transactions, all of which were fraudulent and non-existent from the inception, but which, according to the defendants who assumed the role of firm representatives, required the investor-victim to wire certain pre-transaction advance payments.
In addition, Swarn and Moncrieffe are alleged to have later contacted these same victims by telephone, claiming that federal regulatory agencies, such as the S.E.C. had reviewed their pending stock transactions, and were now requiring that the victims advance more monies before the proposed securities transactions could be finalized. As further alleged in the Superseding Indictment, the defendants acquired in excess of $1 million dollars from unsuspecting victims from numerous foreign countries by the time this scheme had run its course. Moreover, the firms with which the defendants claimed to be associated, which numbered five (5) in total, were fictitious, and made use of elaborately designed impostor websites constructed from material copied from legitimate well-known investment, financial planning, and merger/acquisition firms.
Eckhardt pleaded guilty to count twelve (12) of the Superseding Indictment. This count alleged that from June 2004 through November 12, 2004, the defendant participated in a conspiracy to establish a securities fraud boiler room-type operation, along with co-defendants Swarn and Moncrieffe, in the Dominican Republic. As further detailed in this count of the Superseding Indictment, Eckhardt met on a number of occasions for the purpose of discussing the necessary preliminary details attendant to the establishment of another planned securities fraud boiler room operation, which would be based from a call center in Santo Domingo, Dominican Republic. During these meetings, Eckhardt and the other two (2) defendants, Swarn and Moncrieffe, with Swarn participating by telephone from his then residence in Thailand, are alleged to have discussed various aspects of their proposed operation, which would include stock frauds through telephone solicitations directed toward foreign investors, while conveying the impression, through counterfeited websites and virtual offices, that they were associated with a fictitious New York City-based financial services firm. Swarn was arrested in the Dominican Republic after he traveled there from Thailand to participate in a planning meeting in furtherance of the conspiracy.
Mr. Jiménez commended the investigative efforts of the United States Postal Inspection Service, the Federal Bureau of Investigation, and the United States Securities and Exchange Commission. In addition, Mr. Jiménez commended Dominican Republic authorities for their cooperation and expressed gratitude to law enforcement officials in Australia, New Zealand, Denmark, Singapore, Sweden, and Norway. This case is being prosecuted by Assistant United States Attorney Peter B. Outerbridge and Special Assistant United States Attorney Christopher Stidvent.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls . Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on .
