SEC Charges Stock Promoters In Phony Fax Scam
summary
Joshua Yafa, Michael O'Brien Pickens, and Serafin Sierra defrauded over a million investors by sending fake handwritten faxes impersonating confidential stock tips, causing artificial price spikes in microcap stocks and netting over $300,000 each, leading to SEC civil charges and a related criminal prosecution.
paragraph
The SEC charged Joshua Yafa with creating a fraudulent 'Dr. Mitchel' fax scam that sent 150,000 fake messages urging investors to buy AVL Global stock, which Yafa sold for over $300,000 after its price surged 25%. Michael O'Brien Pickens copied the scheme, modifying the faxes to promote three other microcap stocks—DTEV, IFLB, and SFLM—sending nearly a million faxes and profiting over $300,000. Serafin Sierra, an employee of fax-blasting company Vision Lab Telecommunications, facilitated Pickens’ fraud by providing the original fax template, resulting in civil securities fraud charges by the SEC and a parallel criminal investigation by the U.S. Attorney’s Office.
narrative
The SEC charged Joshua Yafa, Michael O'Brien Pickens, and Serafin Sierra in a coordinated fraud scheme that deceived over one million investors using fake handwritten faxes falsely appearing as confidential stock tips from a fictitious financial planner named 'Dr. Mitchel.' Yafa originated the scam in December 2004 by sending 150,000 faxes promoting AVL Global, Inc. (AVLL), a company he consulted for and was paid in stock; after the stock price jumped 25% on 3,000% higher trading volume, he sold his shares for over $300,000. Pickens then replicated the scheme by obtaining Yafa’s fax template and replacing the stock ticker with those of three other microcap companies—Data Evolution Holdings (DTEV), Infinium Labs (IFLB), and Soleil Film (SFLM)—sending nearly a million faxes and reaping over $300,000 in profits as each stock spiked up to 100%. Serafin Sierra, an employee of Vision Lab Telecommunications, facilitated Pickens’ fraud by forwarding the original AVLL fax, enabling the mass distribution of the counterfeit tips. The SEC filed civil securities fraud charges against all three, emphasizing their focus on both promoters and enablers of microcap manipulation. The U.S. Attorney’s Office for the Southern District of New York also launched a related criminal prosecution. The case highlighted the sophistication of these scams, which exploited the appearance of personal, urgent communication to manipulate retail investors, with the SEC warning the public to treat unsolicited stock tips with extreme skepticism.
Classified unregistered-securities(confidence 100%). EDGAR detection: forms Form D/S-1· recall 41% / precision 30%. detection rule →
Parties
avll stockavll stock pricedata evolution holdings, inc.fictitious financial planner fax urging purchase of avl global, inc.infinium labs, inc.joshua yafarelated criminal actionSecurities and Exchange Commissionserafin sierrasoleil film, inc.united states attorney's office for southern district of new yorkvision lab telecommunications, inc.
Keywords
faxstockmitchelstock promoterscommissionscamcommission'spromoters phonyfinancial plannerpromoterspickensinctickersecinvestors
Exhibits & Attached Documents (1)
Extracted insights
Dollar amounts 1
- $300K $300,000 $100K–$1M
Entities 12
- person avll stock
- person avll stock price
- company data evolution holdings, inc.
- company fictitious financial planner fax urging purchase of avl global, inc.
- company infinium labs, inc.
- person joshua yafa
- person related criminal action
- agency Securities and Exchange Commission
- person serafin sierra
- company soleil film, inc.
- agency united states attorney's office for southern district of new york
- company vision lab telecommunications, inc.
Triples 16
- SEC filed charges Joshua Yafa, Michael O'Brien Pickens, Serafin Sierra
- Joshua Yafa drafted fax Fictitious Financial Planner Fax Urging Purchase Of AVL Global, Inc.
- Joshua Yafa sent faxes to More Than 150,000 Fax Machines Across United States
- Joshua Yafa sold shares of AVLL Stock
- Joshua Yafa reaped proceeds of $300,000
- AVLL Stock Price soared by 25% On December 16, 2004
- Michael O'Brien Pickens obtained copy of Yafa's Dr. Mitchel Fax
- Michael O'Brien Pickens sent faxes to Nearly One Million Fax Machines In December 2004
- Michael O'Brien Pickens made proceeds of $300,000
- Serafin Sierra forwarded fax to Michael O'Brien Pickens
- Vision Lab Telecommunications, Inc. transmitted faxes Dr. Mitchel Faxes For Yafa And Pickens
- Data Evolution Holdings, Inc. had ticker symbol DTEV
- Infinium Labs, Inc. had ticker symbol IFLB
- Soleil Film, Inc. had ticker symbol SFLM
- Three Microcap Stocks climbed by as much as 100% In December 2004
- United States Attorney's Office For Southern District Of New York announced initiation of Related Criminal Action
PDF (from attached: pdf)
Text layers
Extracted body text (4,165c)
SEC CHARGES STOCK PROMOTERS IN PHONY FAX SCAM FOR IMMEDIATE RELEASE 2005-101 Washington, D.C., July 18, 2005 - The Securities and Exchange Commission today filed charges in a scam designed to con investors into believing they had inadvertently received a confidential stock tip faxed from a stockbroker to his client. Unlike typical unsolicited junk faxes recommending penny stocks, the handwritten fax had the appearance of an urgent message from a financial planner intended only for his client, "Dr. Mitchel," urging "Dr. Mitchel" to immediately buy shares of a stock that was about to triple in price. In fact, according to the Commission, neither the financial planner nor "Dr. Mitchel" exists. Rather, the bogus fax was sent to more than one million recipients across the country - including a fax machine in the Commission's San Francisco office - by stock promoters who made over half a million dollars unloading their shares on duped investors. The Commission's complaint, filed in the Southern District of New York, alleges that Joshua Yafa, 31, of Coral Gables, Fla., drafted a fax in which a fictitious financial planner urged "Dr. Mitchel" to buy shares of AVL Global, Inc. (ticker: AVLL), a company which had hired Yafa as a public relations consultant and paid him in stock. Yafa sent the supposedly misdirected "Dr. Mitchel" fax to more than 150,000 fax machines across the United States the evening of December 15, 2004. The complaint alleges that AVLL's stock price soared by 25% the next day on trading volume 3,000% greater than normal, after which Yafa sold his shares of AVLL, reaping more than $300,000 in proceeds. The Commission also charged Nocona, Texas, resident Michael O'Brien Pickens, 51, with hatching a copycat scheme. According to the Commission's complaint, Pickens obtained a copy of Yafa's "Dr. Mitchel" fax and had the AVLL ticker symbol replaced with the symbols of three different microcap companies Pickens had been promoting - Data Evolution Holdings, Inc. (ticker: DTEV), Infinium Labs, Inc. (ticker: IFLB), and Soleil Film, Inc. (ticker: SFLM). The Commission alleges that Pickens sent out nearly a million of the modified "Dr. Mitchel" faxes in December 2004. The share price of the three stocks climbed by as much as 100% on significantly increased volume, and Pickens made over $300,000 selling stock in the companies. The Commission also brought fraud charges against Serafin Sierra, 45, a salesman at Miami-based Vision Lab Telecommunications, Inc., the "fax blasting" company that transmitted both sets of "Dr. Mitchel" faxes. According to the Commission's complaint, Sierra learned of Yafa's scam, and forwarded a copy of the original AVLL "Dr. Mitchel" fax to his customer Pickens, facilitating Pickens' copycat scheme. Linda Chatman Thomsen, Director of the Division of Enforcement, stated, "The Commission is committed to curbing the manipulation of microcap securities, and we will continue to find those who are responsible for committing these frauds and hold them accountable." Helane Morrison, District Administrator of the Commission's San Francisco District Office, said, "The case against Vision Lab's employee confirms our focus not just on the stock promoters who devise these schemes, but those who facilitate fraud on investors." Added Marc J. Fagel, San Francisco's Associate District Administrator and head of Enforcement, "Investors need to be wary of market manipulation schemes, and consider the possibility that what looks like a hot stock tip may actually be part of a well-orchestrated scam." In addition to the Commission's civil action, the United States Attorney's Office for the Southern District of New York has announced the initiation of a related criminal action. # # # For more information, contact: Helane L. Morrison District Administrator (415) 705-2450 Marc J. Fagel Associate District Administrator (415) 705-2449 United States Securities and Exchange Commission San Francisco District Office For reference, a copy of the original Dr. Mitchel fax is attached. Additional information available http://www.sec.gov/news/press/2005-101.htm Home | Previous Page Modified: 07/18/2005
OCR text (4,165c · plain-text · 99% conf)
SEC CHARGES STOCK PROMOTERS IN PHONY FAX SCAM FOR IMMEDIATE RELEASE 2005-101 Washington, D.C., July 18, 2005 - The Securities and Exchange Commission today filed charges in a scam designed to con investors into believing they had inadvertently received a confidential stock tip faxed from a stockbroker to his client. Unlike typical unsolicited junk faxes recommending penny stocks, the handwritten fax had the appearance of an urgent message from a financial planner intended only for his client, "Dr. Mitchel," urging "Dr. Mitchel" to immediately buy shares of a stock that was about to triple in price. In fact, according to the Commission, neither the financial planner nor "Dr. Mitchel" exists. Rather, the bogus fax was sent to more than one million recipients across the country - including a fax machine in the Commission's San Francisco office - by stock promoters who made over half a million dollars unloading their shares on duped investors. The Commission's complaint, filed in the Southern District of New York, alleges that Joshua Yafa, 31, of Coral Gables, Fla., drafted a fax in which a fictitious financial planner urged "Dr. Mitchel" to buy shares of AVL Global, Inc. (ticker: AVLL), a company which had hired Yafa as a public relations consultant and paid him in stock. Yafa sent the supposedly misdirected "Dr. Mitchel" fax to more than 150,000 fax machines across the United States the evening of December 15, 2004. The complaint alleges that AVLL's stock price soared by 25% the next day on trading volume 3,000% greater than normal, after which Yafa sold his shares of AVLL, reaping more than $300,000 in proceeds. The Commission also charged Nocona, Texas, resident Michael O'Brien Pickens, 51, with hatching a copycat scheme. According to the Commission's complaint, Pickens obtained a copy of Yafa's "Dr. Mitchel" fax and had the AVLL ticker symbol replaced with the symbols of three different microcap companies Pickens had been promoting - Data Evolution Holdings, Inc. (ticker: DTEV), Infinium Labs, Inc. (ticker: IFLB), and Soleil Film, Inc. (ticker: SFLM). The Commission alleges that Pickens sent out nearly a million of the modified "Dr. Mitchel" faxes in December 2004. The share price of the three stocks climbed by as much as 100% on significantly increased volume, and Pickens made over $300,000 selling stock in the companies. The Commission also brought fraud charges against Serafin Sierra, 45, a salesman at Miami-based Vision Lab Telecommunications, Inc., the "fax blasting" company that transmitted both sets of "Dr. Mitchel" faxes. According to the Commission's complaint, Sierra learned of Yafa's scam, and forwarded a copy of the original AVLL "Dr. Mitchel" fax to his customer Pickens, facilitating Pickens' copycat scheme. Linda Chatman Thomsen, Director of the Division of Enforcement, stated, "The Commission is committed to curbing the manipulation of microcap securities, and we will continue to find those who are responsible for committing these frauds and hold them accountable." Helane Morrison, District Administrator of the Commission's San Francisco District Office, said, "The case against Vision Lab's employee confirms our focus not just on the stock promoters who devise these schemes, but those who facilitate fraud on investors." Added Marc J. Fagel, San Francisco's Associate District Administrator and head of Enforcement, "Investors need to be wary of market manipulation schemes, and consider the possibility that what looks like a hot stock tip may actually be part of a well-orchestrated scam." In addition to the Commission's civil action, the United States Attorney's Office for the Southern District of New York has announced the initiation of a related criminal action. # # # For more information, contact: Helane L. Morrison District Administrator (415) 705-2450 Marc J. Fagel Associate District Administrator (415) 705-2449 United States Securities and Exchange Commission San Francisco District Office For reference, a copy of the original Dr. Mitchel fax is attached. Additional information available http://www.sec.gov/news/press/2005-101.htm Home | Previous Page Modified: 07/18/2005