David Sidoo faces new fraud allegations, co-defendants criminally charged
Vancouver businessman David Sidoo, who spent three months in a US federal prison in 2020 after pleading guilty to wire and mail fraud conspiracy charges, once again finds himself in legal jeopardy.
On Thursday, the United States Securities and Exchange Commission filed a lawsuit in federal court in the Southern District of New York alleging that Sidoo and seven co-defendants conspired to defraud investors out of US$145 million.
“The defendants engaged in the multi-year penny stock fraud scheme,” the filing said.
According to the FBI and the District Attorney for the Southern District of New York, four of Sidoo’s co-defendants in the SEC filing also have criminal charges, two of whom have already been arrested.
In a press release, the US Department of Justice said there were 10 defendants in three unsealed indictments and they included residents of Canada, the United Kingdom, Bulgaria, Spain , Monaco, Turkey and the Bahamas.
“These pernicious ‘pump-and-dump’ schemes enriched the defendants while causing real harm to ordinary retail investors who had to swallow the losses,” U.S. Attorney Damian Williams said in the statement.
The charges against each individual in the group include conspiracy to commit securities fraud, conspiracy to commit wire fraud, multiple counts of securities fraud, wire fraud and money laundering.
Many of these charges carry maximum penalties of 20 years in prison per count.
Sidoo’s name does not appear in the indictments, but the names of Ronald Bauer, Daniel Ferris, Craig Auringer and Peter Mihaylov appear in both criminal court and SEC filings.
No one answered the intercom to Sidoo’s West Point Gray home on Friday – but CTV News spoke to him at a community event in February – asking him specific questions about certain businesses and whether it was true that investors had lost millions while he grew rich.
“You know, we’re in venture capital. We start businesses,” Sidoo said. “I think there is a misconception of some of the facts that you have.”
Court documents accuse Sidoo and his co-defendants of using offshore shell companies to conceal their holdings in a number of different companies while spending millions of dollars promoting the shares of those companies.
The filing alleges they encouraged investors to buy shares at a time when the defendants themselves “did not believe the statements, as evidenced by their simultaneous and massive trades in the opposite direction as they collectively sold their shares.” during the campaign.
SEC investigators say Sidoo was well aware of its responsibilities and obligations to potential investors.
“For his part, Sidoo had worked for eight years as a stockbroker (and as such had significant exposure and therefore knowledge of anti-fraud, registration, beneficial ownership reporting and disclosure requirements). ‘insider trading under the federal securities laws),’ the document read.
Sidoo’s criminal record in the United States is linked to his role in the US college admissions scandal which saw several wealthy and high-profile parents go to jail for fraudulently getting their children into prestigious post-secondary institutions. and corruption.
Sidoo admitted to paying a Harvard University graduate $200,000 to take entrance exams for his two sons – who would go on to attend UC-Berkeley and the University of Southern California, respectively.
When CTV News had the opportunity to interview Sidoo at the community event in February, the offer was framed as a chance to talk to Sidoo about the philanthropy he had already undertaken and planned to undertake – as well than past mistakes.
“The only thing I can say is that people make mistakes. We all take turns making them. Some are big and some are small. You move on,” he said.
But soon after the conversation turned to questions about his business practices, Sidoo abruptly ended the interview and walked out of the building.
None of the allegations in the latest complaint have been proven in court, but if found to be true, the defendants could face financial penalties in addition to being barred from holding certain positions at publicly traded companies and to trade certain types of stocks.
Those charged with criminal charges could face lengthy prison sentences.
The unsealed criminal indictment against Sidoo’s four co-defendants in the SEC filing lists three people as unnamed co-conspirators as defendants.
One of these individuals is identified only as “CC-3” and the identifying information indicates that this individual is a Canadian citizen who allegedly “participated in the stock manipulation schemes by, among other things, coordinating campaigns promotional material that at times caused materially false and misleading information to be disseminated to the investing public for the purpose of inflating the stock price and trading volume of an issuer’s stock.”
The SEC filing accuses Sidoo of coordinating a promotional campaign to get investors to buy stock in a company called American Helium.
“Sidoo also had and exercised authority over American Helium’s promotional and creative content. And Sidoo also concurrently reviewed reports from NYC Media Company A reflecting the impact of American Helium’s promotional activity on its stock price and trading volume,” the SEC filing states.
It is unclear whether the District Attorney’s Office for the Southern District of New York has any further indictments to raise at a later date, whether Sidoo is personally under criminal investigation for the alleged fraud. of several million dollars, or if he is one of the anonymous. co-conspirators who cooperated with investigators.