It's a high-flying scandal for two California men accused of a fraudulent ‘pump-and-dump’ scheme that potentially left investors on the ground floor with empty pockets. Moorpark resident Kalistratos “Kelly” Kabilafkas, 48, and Jack Edward Daniels, 74, of Agoura Hills were indicted on charges of conspiracy and securities fraud in connection with their operation involving Airborne Wireless Network, as announced by the Department of Justice.
Both men are accused of a multi-year conspiracy to dupe investors by taking control of a publicly traded shell company and rebranding it as Airborne. Kabilafkas, according to the indictment, made a play using a $474,500 sham charitable donation, and Daniels, Airborne’s president and sole director, allegedly helped file face reports with the SEC to keep investors in the dark, according to prosecutors.
An aggressive multi-million-dollar advertising campaign followed, aimed at artificially inflating Airborne's stock price, the DOJ reported. As a result, share prices saw brief dramatic increases, during which Kabilafkas is alleged to have sold off shares for a sizeable profit.
While the charges might seem like a guaranteed crash landing for the duo, an indictment is not a conviction. Kabilafkas and Daniels are presumed innocent until proven guilty, the DOJ reminds the public. Yet, if found guilty, they could be facing a maximum of five years for conspiracy and 20 for securities fraud. Kabilafkas is slated for arraignment today, while Daniels will see his day in court on May 3.
The case, which is being investigated by the United States Postal Inspection Service, the FBI, and IRS Criminal Investigation, is a stark reminder of the perils lurking in the securities markets. Prosecutors James C. Hughes and trial attorneys Theodore M. Kneller alongside Matt Kahn stand as the bulwark against such alleged crimes. For those who fell victim to the scheme, the DOJ encourages contact with their Victim Witness Unit for support.
According to the DOJ press release, victims can reach out toll-free at (888) 549-3945 or get in touch via email at [email protected] for more information on their rights and the support available to them.
