Two top executives of New York City-based Spongetech Delivery Systems Inc. were arrested Wednesday and charged with fraud in an alleged scheme to defraud investors by reporting false financials and grossly overstated sales figures. Steven Y. Moskowitz, 45, of Flushing, New York, Spongetech's chief operating officer and chief financial officer, together with Michael Metter, 58, of Greenwich, Connecticut, its chief executive officer, were charged with conspiracy to commit securities fraud and with obstruction of justice by federal authorities. They are alleged to have engaged in a "pump and dump" scheme and falsified company financials by claiming revenues from nonexistent companies. Prosecutors claim that SpongeTech created five phony companies that accounted for 99 percent of its sales, including: SA Trading Co., USA Asia Trading, Dubai Export Import Co., New Century Media and Fresco Sales Corp.
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Hat tip: Reader Doug
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1 comment:
if you were an investor is there hope? class action, etc
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