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Union County,Man Admits To Penny Stock Scheme

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the staff of the Ridgewood blog

Springfield NJ, The owner of a purported business consulting firm today admitted operating a $1.1 million scheme that artificially inflated the stock price of a publicly traded company he controlled, U.S. Attorney Craig Carpenito announced.

James Farinella, 52, of Springfield, New Jersey, pleaded guilty before U.S. District Judge Anne E. Thompson in Trenton federal court to one count of conspiracy to commit securities fraud.
According to the documents filed in this case and statements made in court:

From June 2012 through December 2012, Farinella and others allegedly operated a scheme to profit by fraudulently inflate the prices of Pazoo Inc. (PZOO). Pazoo had little or no real business operations, and when it started trading in June 2012, Farinella controlled 98 percent of the free-trading shares in Pazoo.
Farinella and other conspirators allegedly inflated the price of those shares by orchestrating a series of trades between accounts they controlled to create the appearance that Pazoo stock was rising in price and heavily traded. In order to further inflate the prices, Farinella and his conspirators also disseminated misleading promotional materials to lure investors to purchase the stocks, including touting Pazoo as a leading provider of nutritional supplements for people and their pets.
After inflating the price of the stock, Farinella and his conspirators sold large volumes of the stock to investors at the artificially inflated prices. The company’s stock price then dropped, causing victims of the scheme to suffer losses. The alleged stock manipulation scheme generated approximately $1.1 million in gross trading proceeds.

The conspiracy to commit securities fraud count carries a maximum potential penalty of five years in prison and a $250,000 fine or twice the gross gain or loss from the offense. Sentencing is scheduled for Feb. 5, 2019.

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