Seven Accused of $45M Pump-and-Dump Fraud

A California person was charged on Tuesday with collaborating with his father and five other individuals in a pump-and-dump scheme that defrauded buyers in a tech firm of almost $45 million.

The U.S. Securities and Trade Fee explained Kalistratos “Kelly” Kabilafkas of Moorpark, Calif., concealed his management of Airborne Wi-fi Community as part of an alleged fraud that culminated in him and his associates reaping $23 million by dumping shares in Airborne whilst also elevating $22 million from buyers through community and non-public choices.

For the duration of the promotional marketing campaign, which include television commercials, to “pump” Airborne’s inventory, the share price tag rose from $.45 in April 2016 to a higher of $three.89 in February 2017.

Kabilafkas’ alleged associates bundled his father Timoleon “Tim” Kabilafkas and Airborne CEO Jack Daniels. According to an SEC civil grievance, he and his relatives employed some of the proceeds from the scheme to buy serious estate and spend for luxury automobiles and advancements to his residence.

“Kelly Kabilafkas orchestrated a huge-ranging scheme to deceive gatekeepers, conceal from buyers the correct possession of a community firm, and then manipulate the company’s inventory,” Jennifer S. Leete, affiliate director of the SEC’s Enforcement Division, explained in a information release.

According to the SEC, Kabilafkas’ car for the alleged fraud was Ample-Tee Inc., a shell firm that he acquired for $350,000 in Oct 2015, which include a management block of 84.1 million restricted shares and thirty million S-1 shares.

Kabilafkas allegedly hid his possession of Ample-Tee by, amongst other items, putting the restricted shares in the name of Daniels and providing about 13.six million of the S-1 shares to his father and other alleged associates.

The defendants “falsely finished share transfer paperwork, and created other phony and deceptive statements, to … convince broker-dealers to accept [the shares] for deposit and obvious them for sale to the community,” the SEC explained.

Ample-Tee adjusted its name in May 2016 to Airborne Wi-fi Community, which purported to be building a community to link aircraft in flight through wi-fi routers.

Airborne Wi-fi Community, Ample-Tee Inc., Kelly Kabilafkas, Pump and dump, U.S. Securities and Trade Fee