A Miami Beach man accused of stock fraud must pay $5.7 million in ‘ill-gotten gains’
Court documents say federal prosecutors in Brooklyn are in plea negotiations with Miami Beach resident Garrett O’Rourke, but the Securities and Exchange Commission already has a judgment ordering O’Rourke to pay $5,763,719 in “ill-gotten gains” plus interest.
The SEC complaint says the 32-year-old O’Rourke, using the alias “Jonathan Banks” and in partnership with Maryland resident Michael Black, ran a pump-and-dump stock fraud involving companies AVl Group, Inc., EnviroTechnologies International, Cyberfort Software Inc. and other companies.
Court documents say Black, 67, in the process of pleading guilty to conspiracy to commit wire fraud in the Brooklyn federal court.
Pump-and-dumps work pretty much as they sound like they should. People owning the stock or their cronies, sometimes stockbrokers, hype the stock to prospective buyers to create the illusion of demand. The falsely inflated demand falsely inflates the stock price (“the pump”). When the price is high enough, the stock owners sell for a profit (“the dump”).
A broker or broker representative who worked with Black, the SEC said, turned out to be an undercover FBI agent.
O’Rourke, the SEC said, cold-called potential investors, slinging promotional lies about the companies’ futures as well as his association with financial institutions.
“Black coordinated the sale of AVl Group stock with the timing of O’Rourke’s AVl Group stock promotional efforts, and Black subsequently split the proceeds of those stock sales with O’Rourke,” the SEC complaint said. “[O’Rourke’s and Black’s] victims, including the elderly retail investors who invested their retirement savings based on O’Rourke’s material misrepresentations, were left holding losing investments while [O’Rourke and Black] profited handsomely.”
This story was originally published December 13, 2020 at 2:17 PM.
