In a recent ruling highlighting the pernicious world of securities fraud, two men, Paul Spivak of Ohio and Charles Scott of Virginia, were found guilty on numerous charges, including conspiracy to commit securities fraud. The jury delivered the verdict following a four-week trial that untangled the web of deceit spun by the defendants to dupe investors into purchasing stock at inflated prices.
Spivak, 65, formerly leading U.S. Lighting Group, Inc. (USLG) as majority owner and CEO, masterminded the scheme alongside his accomplices. According to the U.S. Department of Justice court documents, Spivak was convicted on two counts of wire fraud and entered a guilty plea for various other charges, including four counts of wire fraud, two counts of securities fraud, and an additional count of conspiracy to commit securities fraud. Scott, 70, was found guilty on one count each of securities fraud and securities fraud conspiracy. The convoluted plot, which ran from 2016 to 2019, involved a reverse merger with a shell company and using call rooms to falsely boost USLG’s stock price, a technique commonly called “pumping.”
The operation involved few accomplices and pressured numerous, often elderly, investors across the country into acquiring USLG “penny” stock. In contrast, the stock price was artificially inflated. A report from the U.S. Department of Justice revealed that Spivak had arranged for co-conspirators to sell these restricted shares under the guise of steep discounts, all while concealing the true nature of the transactions through fraudulent consulting agreements…