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PRESS RELEASE: California Attorney Indicted and New Jersey Stock Promoter Convicted in Greenway Technology Stock Manipulation Scheme

U.S. Attorney’s Office
December 11, 2015

District of Massachusetts
(617) 748-3100

California Attorney Indicted and New Jersey Stock Promoter Convicted in Stock Manipulation Scheme

BOSTON—A California-licensed attorney was indicted in U.S. District Court in Boston yesterday on charges arising out of his participation in a scheme to manipulate the shares of a publicly-traded microcap company. Earlier this week, a New Jersey man pleaded guilty to charges related to his participation in the same scheme.

Jehu Hand, 59, was indicted on charges of conspiracy to commit securities fraud and wire fraud, securities fraud and wire fraud based on his involvement in a pump-and-dump scheme to manipulate the market and to sell unregistered shares of the stock of Greenway Technology. Greenway was a microcap or “penny stock” company that claimed to be on the verge of acquiring hotels that would cater to gay travelers in several major cities.

On Tuesday, Dec. 8, 2015, Mitchell Brown, 50, pleaded guilty to one count of conspiracy and one count of securities fraud for his participation in the Greenway pump-and-dump scheme. U.S. District Court Judge William G. Young scheduled sentencing for Jan. 21, 2016.

According to court documents, in 2012, Hand, Brown and their co-conspirators engaged in a scheme to obtain and conceal their control over the majority of Greenway’s stock so that they could “pump” up the company’s share price and then secretly “dump” their shares into the market by selling at the inflated price. Hand issued false legal opinion letters to Greenway’s transfer agent and to stock brokers. The opinion letters, which intentionally disguised the conspirators’ control over Greenway’s stock, enabled Hand, Brown and their co-conspirators to obtain and sell Greenway’s stock in the open market in violation of federal securities laws. Hand also created and backdated convertible promissory notes. Hand then relied on the false date on the convertible promissory notes when providing his legal opinion that federal securities laws had been followed and that the notes could be converted into seven million shares of Greenway stock, which were then issued to entities controlled by Brown.

With millions of shares of Greenway stock at the conspirators’ disposal, Brown and another co-conspirator, proceeded to hire stock promoters to send blast e-mails that reached many potential investors, including those in Massachusetts, and contained misleading information touting Greenway’s stock. As a result of the hype created by the false and misleading promotional campaign, Hand, Brown and their co-conspirators were able to sell their Greenway stock to unwitting investors at artificially high prices.

These charges arise out of a multi-year investigation focusing on preventing fraud in the microcap stock markets. Microcap companies are small publicly traded companies whose stock often trades at pennies per share. Fraud in the microcap markets is of increasing concern to regulators as such markets have proven to be fertile grounds for fraud and abuse. This is, in part, because accurate information about microcap stocks may be difficult for the average investor to find, since many microcap companies do not file financial reports with the Securities and Exchange Commission (SEC).

The charges and conviction follow a series of cases filed by the U.S. Attorney for the District of Massachusetts and the SEC in which more than 30 individuals have been criminally charged and convicted for using kickbacks and other schemes to trigger investment in, or manipulate the stock of, thinly-traded stocks.

The charge of conspiracy to commit securities fraud provides for a sentence of no greater than five years in prison, three years of supervised release and a fine of $250,000 or twice the gain or loss to the victim. The charge of securities fraud and wire fraud provides for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $250,000 or twice the gain or loss. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Carmen M. Ortiz and Harold H. Shaw, Special Agent in Chargeof the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Vassili Thomadakis and SEC attorneys Andrew Palid and Eric Forni, who were appointed as Special Assistant U.S. Attorneys.

The details contained in the charging document are allegations. Hand is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

About FREDERICA CADE

Most of the information you will see comes from some Federal/state Government documents or Federal/State Governm Agency. -----------------------------------------------The fellow that can only see a week ahead is always the popular fellow, for he is looking with the crowd. But the one that can see years ahead, he has a telescope but he can't make anybody believe that he has it. ~~~~Will Rogers __The woman who follows the crowd will usually go no further than the crowd. The woman who walks alone is likely to find herself in places no one has ever been before.~ Albert Einstein ~"I never work better than when I am inspired by anger; for when I am angry, I can write, pray, and preach well, for then my whole temperament is quickened, my understandingsharpen​ed, and all mundane vexations and temptations depart.” ~Dr. Martin Luther King Jr. _________________________________________________________________________________________ ~"The bosom of America is open to receive not only the Opulent and respectable Stranger, but the oppressed and persecuted of all Nations and Religions; whom we shall welcome to a participation of all our rights and privileges, if by decency and propriety of conduct they appear to merit the enjoyment".~___________________________________ George Washington, Address to the Members of the Volunteer Association of Ireland, December 2, 1783 Fredericacade@gmail.com

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