Florida Man One of Seven Individuals Charged By SEC in a $45 Million Fraud Scheme
On March 2nd, 2021, the Securities and Exchange Commission (SEC) announced investment fraud charges against seven individuals and one company. The federal regulatory agency alleges that the defendants were involved in a scheme to gain control over a company called Airborne Wireless Network, with the ultimate goal being the defrauding of investors. Notably, Moshe Rabin, a resident of Broward County, Florida was among the individuals charged by the SEC. Below, our Miami investment fraud attorneys offer a more detailed explanation of the charges.
SEC Complaint: $45 Million Pump-and-Dump Investment Fraud Scheme
Background
The SEC filed its securities fraud complaint in the United States District Court for the Southern District of New York. In the document, the agency lays out the background of the case. Between August of 2015 and May of 2018, a man named Kelly Kabilafkas allegedly organized a fraud scheme with the help of the other six individuals named by the agency, including Moshe Rabin of Florida.
Allegations
Mr. Kabilafkas secretly gained control of virtually all outstanding shares of the publicly traded company Airborne Wireless Network. Purportedly involved in the development and licensing of broadband services on private and commercial planes, Airborne Wireless Network was essentially a shell company. The SEC alleges that Mr. Kabilafkas distributed shares of the stock to his co-conspirators. From there, they put significant financial resources into “pumping” up the stock—pushing it on retail investors throughout the United States, including in Florida.
While they were conducting a large-scale promotional campaign for Airborne Wireless Network, Mr. Kabilafkas, Mr. Rabin, and the other named individuals allegedly dumped massive amounts of the stock. They allegedly sold a collective 11.8 million shares of the stock for a total of $22 million. Beyond that, they were able to raise an additional $22.8 million in funds through public and private offerings. Serious material misrepresentations were made to investors in these securities offerings.
Proposed Sanctions
The SEC is taking enforcement action to halt any further securities fraud, protect individual investors, and preserve the integrity of public markets. The defendants have been charged with violations of federal securities laws. In its claim, the SEC is seeking all appropriate forms of remedy, including civil penalties and disgorgement of ill gotten gains.
Notably, the federal agency has already entered into a proposed settlement with Moshe Rabin. Without admitting or denying the allegations raised against him, Mr. Rabin has agreed to pay a $125,000 civil monetary penalty and consented to a penny stock bar. This settlement is still subject to approval by the court.
Call Our Miami, FL Investment Fraud Attorneys Today
At Carlson & Associates, P.A., our Florida investment fraud lawyers have the skills and expertise it takes to get results. If you suffered financial losses in connection with a fraudulent scheme, we will help you fight for justice. Call us now for a confidential evaluation of your case. Our securities fraud lawyers represent investors in Miami and throughout all of South Florida, including in Broward County and Palm Beach County.
Resources:
sec.gov/litigation/complaints/2021/comp-pr2021-38.pdf
sec.gov/news/press-release/2021-38