Ex-stockbroker, Joseph A. Padilla, received a five-year prison sentence on October 2 for his part in a high-stakes penny-stock securities fraud scheme. Reports from the Department of Justice (DOJ) confirm he and his accomplices manipulated penny-stock companies' shares to accrue tens of millions of dollars illegally.
Padilla started the fraud scheme between January and July 2021, orchestrating market manipulation around shares of Oncology Pharma, Inc. (ONPH). The company, a thinly traded entity on the over-the-counter securities market, had its shares transferred to multiple accounts for Padilla's clients operating via Cayman Islands broker Valor Capital.
The DOJ's investigation found that Padilla was responsible for artificially driving up Oncology Pharma's stock price through manipulative trading practices. He would afterwards unload the shares onto unsuspecting investors during promotions and reap millions in ill-gotten gains.
Padilla was also implicated in a similar fraud scheme between February and April 2021 involving Charlestowne Premium Beverages Inc. (FPWM). Having artificially raised the stock price, Padilla then facilitated the illegal sale of millions of Charlestowne's shares, realizing millions of dollars in unlawful proceeds.
Padilla's indictment included multiple counts of securities fraud, conspiracy to commit securities fraud, and attempting to cause the production of an identification document without lawful authority. The last charge relates to efforts Padilla made to acquire to a fraudulent Ukrainian passport, having surrendered his own as part of pre-trial release terms, and an apparent bid to evade prosecution.
