In December, the U.S. Attorney’s Office for the Southern District of New York criminally charged Edward Durante, also known as Ted Wise, Edward Wise, Efran Eisenberg, Anthony Walsh, Ed Simmons and Yulia, with operating a multi-year offering fraud that targeted investors in New England, Ohio and California. The Securities and Exchange Commission (SEC) also civilly charged Durante and the complaint was filed in the federal district court of Manhattan. Durante allegedly defrauded over 100 investors out of over $30 million through the sale of securities of a pump-and-dump scheme in VGTel stock between 2012 and 2014. VGTel was a shell company Durante controlled. He also set up other shell companies during the scheme; New Market Enterprises and Zenith Estates, that purchased controlling interests in VGTel Inc. VGTel, Inc. was a penny stock, meaning its shares were valued at less than a dollar per share and not listed on any exchange.
Durante previously served a 10-year prison term beginning in 2001 when he was convicted of securities fraud. While in prison, the US Attorney alleges that Durante began planning this new scheme. He allegedly told investors, through licensed stockbrokers and investment advisers, that their stock proceeds would be used to fund VGTel’s operations. In reality, Durane himself used almost $9 million of the funds for personal use. Durante sold around 6 million shares of the false stock through investor accounts managed by licensed brokers and advisers and nominee accounts, paying investment advisers to then sell shares of stock to their customers. He held sales meetings in San Diego, California and Tewksbury, Massachusetts to convince investors to invest money in his fake companies. He then matched trading of VGTel stock with a stockbroker to artificially control the price of the stock. This is a classic pump-and-dump scheme, which involves accumulating a stake in a company at a low price and then urging others to buy shares, thereby driving up the price, which is an illegal, fraudulent scheme. He was recently extradited from Germany, and is currently in prison awaiting trial. He has pleaded not guilty.
Based on our investigations and according to allegations in a relevant complaint, Sheik F. Khan, a former broker with Pruco Securities Corporation in Newark, New Jersey from February 1994 until June 2002 and Ameritas Investment Corp in Murrieta, California from May 2002 until December 2013 is alleged to have sold approximately $2 million worth of securities to 20 clients in Durante’s pump-and-dump scheme. This was according to an SEC complaint. According to her Financial Industry Regulatory Authority (FINRA) online, public BrokerCheck record, Khan has one regulatory action against her and is not currently licensed within the industry. If you or someone you know invested money with Durante or Khan, please contact our securities law firm for a free, no obligation consultation with a securities attorney to discuss your options of suing to recover your investment losses in the FINRA arbitration forum.