The scheme involving the Crown Marketing stock follows a similar pattern. Once again, Hand and his co-conspirators utilize front companies to hide their control over most of Crown’s stock. Similarly, the stock is sold to the public as a result of a false filing that Hand makes with the U.S. Securities and Exchange Commission. Following the filing, the con artists distribute misleading press releases and promote Crown’s stock. In this instance, Crown allegedly possesses a revolutionary drug-delivery technology. The problem, however, is that there is no valid commercial interest for the product. As with Greenway, once Crown’s stock price and trading volume spikes, they dump the stock. In doing so, Hand and his partners profit handsomely.
Swift Justice and Stiff Penalty
In total, between the Greenway and Crown schemes, Hand and his co-conspirators cause losses of more than $1.5 million.
The charge of conspiracy provides a sentence of no greater than five years in prison, three years of supervised release, and a fine of $250,000, or twice the gross loss to the victim. The charges of securities fraud and wire fraud provide 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 gross gain or loss.
