Nathan B. Montgomery, the head of a company featured in an earlier Sharesleuth story on Mesa Energy Holdings Inc.(OTCBB: MSEH.OB) and a defendant in a civil securities case brought by the SEC, was convicted Jan. 31 in the Southern District of Florida in a criminal stock pump and dump scheme.
Montgomery was found guilty of conspiring to commit securities and wire fraud. The Justice Department said in a news release that Montgomery and business partner Frank Cushen — also convicted Wednesday –, tried to manipulate the stock price of CO2 Tech (Pink Sheets:CTTD.PK), a company they controlled, by issuing misleading press releases. One, for example, claimed the CO2 Tech had a business relationship with Boeing to reduce pollution from airplanes.
“CO2 Tech never had any business or relationship with Boeing,” the DOJ said.
The DOJ said Montgomery and Cushen coordinated trades of CO2 Tech stock to give the appearance of investor interest, and dumped their shares through trading desks at companies known as Red Sea and Sentry Global. Curshen controlled Red Sea, a Costa Rican company, according to the DOJ, and used it to launder the proceeds of the CO2 Tech pump and dump scheme through investment accounts in the United States and Canada.
At sentencing, Curshen faces a sentence of up to 65 years in prison. He was convicted of conspiracy to defraud, two counts of mail fraud and conspiracy to launder money. Montgomery faces a sentence of up to five years in prison. Both are scheduled to be sentenced in Florida on May 11, 2012.