Feds: Two ex-stockbrokers convicted of 'pump and dump' scheme
Jeffrey Chartier drives his RV. Credit: U.S.Attorney Exhibits.
Two former stockbrokers were convicted Wednesday of involvement in a $147-million fraud that swindled mostly the “unsuspecting and elderly,” according to officials.
The six-week-long trial of Jeffrey Chartier, 56, of Los Angeles and Lawrence Isen, 66, of San Diego, at the federal courthouse in Central Islip was the last federal jury trial scheduled on Long Island before the suspension of trials due to the coronavirus pandemic.
On Monday the Chief Judge of the Eastern District, Roslynn Mauskopf, halted all federal criminal and civil jury trials until at least April 27, pending further notice, in the district that also includes Brooklyn.
In the case of Chartier and Isen, the jury of nine women and three men found them guilty of all counts after two days of deliberation, including convictions for conspiracies to commit money laundering, wire fraud and securities fraud, as well as money laundering, officials said. Chartier was also convicted of attempted obstruction of an official proceeding for lying to FBI agents.
The two were the last of sixteen defendants to be convicted in a classic fraud scheme known as a "pump and dump." In such a scheme, participants take control of stock and artificially inflate its value—the pump. Then using high pressure tactics, they operate from so-called boiler rooms and sell the stock to victims, pocketing their profits, which soon drastically deflates to its true value—the dump.
Four of the participants who pleaded guilty have been sentenced to prison terms of between two to ten years in prison, according to officials. The others are awaiting sentencing.
Chartier and Isen face up to more than twenty years when they are sentenced.
In this scheme, which operated from 2013 to 2017, the participants manipulated the value of stock of four publicly traded companies upward, and sold them to victims from boiler rooms based in Melville and Plainview, according to officials. Among other names, officials said the boiler rooms were known as Elite Stock Research and Power Traders Press.
RV with its own fireplace that defendant Jeffrey Chartier bought with money made in his scheme, according to Eastern District prosecutors. (Photo: U.S.. Attorney exhibits) Credit: U.S.Attorney Exhibits.
Testimony at the trial included a co-conspirator stating that Chartier used part of his earnings in the scheme to buy an RV valued at $350,00 that included a fireplace.
Defendant Jeffrey Chartier poses in front of his RV's fireplace. (Photo: U.S. Attorney exhibits) Credit: U.S.Attorney Exhibits.
In a statement after the conviction, Eastern District United States Attorney Richard Donoghue said: ”Chartier, Isen and their co-conspirators lied to investors, including elderly victims, but the jurors saw the truth—that these defendants were brazenly stealing money through fraudulent investment schemes.” The case was prosecuted by Assistant United States Attorneys Whitman Knapp and Kaitlin Farrell.
Chartier’s attorney, Robert LaRusso said: “We are extremely disappointed in the jurors’ verdict and will file appropriate post-trial motions and appeals after sentencing. We continue to maintain our client’s innocence.”
Isen’s attorney, John Kaley, said: “We’re disappointed in the verdict and continue to maintain his innocence. At the appropriate time we will file an appeal.”
Bob Kessler covers federal law, including law enforcement agencies such as the FBI, DEA, IRS and ATF, as well as the federal courts.
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