US Attorney – Defendant Convicted Of Wire And Securities Fraud

DEFENDANT CONVICTED OF WIRE AND SECURITIES FRAUD

R. Alexander Acosta, United States Attorney for the Southern District of Florida, and Jonathan I. Solomon, Special Agent in Charge, Federal Bureau of Investigation, announced that on Monday, May 5, 2008, a jury convicted defendant Nicholas Bachynsky of one count of conspiracy, three counts of wire fraud, and one count of securities fraud. Bachynsky, who is 65 years-old, faces a 5-year maximum term of imprisonment per count for the conspiracy and wire fraud convictions and a 10-year maximum term of imprisonment for the securities fraud conviction. The jury also returned a supplemental verdict forfeiting Bachynsky’s interest in $450,000 in United States currency and two Swiss bank accounts.

Bachynsky’s sentencing is set for September 5, 2008, at 9:00am before U.S. District Court Judge Adalberto Jordan.

Bachynsky’s three co-defendants in the case – Arthur Scheinert, Laurence Dean, and Richard Anders – have all pled guilty. Both Scheinert and Dean already have been sentenced to 5-year terms of imprisonment. Anders is pending sentencing on May 16, 2008, before Judge Jordan.

As was set forth during the six and a half week trial, the scheme that resulted in Bachynsky’s conviction arose out of the marketing of stock and notes for a start-up company known as Helvetia Pharmaceuticals, Inc. Helvetia was launched in early 2001 to administer and develop a cancer treatment in Europe known as intracellular hyperthermia therapy. Helvetia’s solicitation of investors was centered around a series of sales materials that contained a succession of significant representations. Bachynsky was the primary author of the false representations contained in the Helvetia sales materials.

During the trial the government called witnesses and introduced exhibits that showed that the sales materials falsified the results of a series of unsuccessful laboratory and clinical trials, claiming that the trials had shown the therapy to be successful. The sales materials also falsely claimed that Helvetia possessed exclusive rights to the intercellular hyperthermia therapy. However, several years earlier Bachynsky had sold the rights to therapy to a former business associate. The sales materials further falsely claimed that the treatment was non-toxic, when in fact the treatment was based upon a substance that was not approved for human consumption by the federal Food and Drug Administration and was used commercially in pesticides and wood preservatives. The sales materials also covered up Bachynsky’s true role in the company and failed to disclose both his criminal history and adverse regulatory history.

Between early 2001 and August 2002, Helvetia raised close to $6 million from investors. Most investors lost their entire investment. Substantial portions of investor funds were misappropriated by Helvetia insiders for their own personal use.

Mr. Acosta commended the investigative efforts of the Federal Bureau of Investigation. Mr. Acosta also expressed appreciation for the cooperative efforts of the Southeast Regional Office of the Securities and Exchange Commission. Bachynsky’s conviction followed more than three years of extensive pre-trial litigation in this case. From the summer of 2004 until his passing in late September 2007, the case was prosecuted by Assistant United States Attorney Hugo L. Black, III. Bachynsky was tried by Assistant United States Attorneys Michael Davis and Mark Dispoto. AUSAs Davis and Dispoto were assisted by certified legal intern Allison Soares of St. Thomas University School of Law, and paralegal specialist Maureen Booker of the U.S. Attorney’s Office.

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 http://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 http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.