2019-09-26 DOJ SDNY press_release 119 KB 4,984 chars

Former CEO Pleads Guilty In Scheme To Defraud Elderly Victims In The Sale Of Worthless Stock

Caption: United States v. Geoffrey S. Berman, et al.

summary

Former CEO Keith Orlean pled guilty to conspiracy and securities fraud for deceiving over 50 elderly victims into buying worthless stock in shell companies he controlled, using a fake salesman alias and false claims of impending IPOs and billion-dollar sales, resulting in over $2 million in losses and a pending sentencing for up to 25 years in prison.

paragraph

Keith Orlean pled guilty to one count of conspiracy to commit securities fraud and one count of securities fraud for orchestrating a scheme that defrauded more than 50 elderly investors out of over $2 million. He and his co-defendants used the fake identity of 'Mike Palmer' to pressure victims with lies about non-existent IPOs and multi-billion-dollar sales of companies like Digital Donations Technologies, which had little to no commercial value. Orlean faces a maximum penalty of 25 years in prison and is scheduled to be sentenced on January 10, 2020, after the FBI and U.S. Attorney’s Office for the Southern District of New York uncovered callous remarks about victims’ deaths and aggressive sales tactics.

narrative

Former CEO Keith Orlean pled guilty to conspiracy to commit securities fraud and securities fraud for leading a long-running scheme that targeted over 50 elderly victims with false investment opportunities. Using the fabricated identity of 'Mike Palmer'—actually one of his co-defendants—he and his associates pressured victims by claiming their shell companies, including Digital Donations Technologies, were on the verge of a $300 million IPO or a $1.5 billion private sale, despite knowing the companies had virtually no value. Intercepted phone calls revealed callous attitudes, including one co-defendant remarking, 'I knew I should have pulled the last $10,000 out of him' after a victim died. The scheme, active since April 2014, generated more than $2 million in fraudulent stock purchases from vulnerable seniors. The FBI and the U.S. Attorney’s Office for the Southern District of New York led the investigation, uncovering the deception through wiretaps and financial records. Orlean, 61, of Dix Hills, New York, faces a maximum penalty of 25 years in prison—five years for conspiracy and 20 for securities fraud—and is scheduled for sentencing on January 10, 2020. His co-defendants remain unnamed in public filings, with charges against them still alleged, not proven. The case highlights predatory exploitation of the elderly through sophisticated financial fraud disguised as legitimate investment opportunities.

Enriched metadata

Scheme: pre-ipo-fraud (95%)
Court: Southern District of New York
Outcome: pleaded
Victim loss: $1,500,000,000

Classified pre-ipo-fraud(confidence 95%). EDGAR detection: forms S-1/Form D/1-A· recall 72% / precision 8%. detection rule →

Extracted insights

Dollar amounts 4

$1.50B $1.5 billion ≥$1B
$300.00M $300 million $100M–$1B
$2.00M $2 million $1M–$10M
$10K $10,000 $10K–$100K

Entities 6

scheme_term 20 years in prison for securities fraud
scheme_term conspiracy to commit securities fraud
scheme_term five years in prison for conspiracy to commit securities fraud
person Geoffrey S. Berman
person keith orlean
scheme_term securities fraud

Triples 12

Keith Orlean pled guilty to conspiracy to commit securities fraud
Keith Orlean pled guilty to securities fraud
Keith Orlean operated fraudulent scheme targeting elderly persons
Keith Orlean solicited stock purchases from more than 50 elderly persons
Keith Orlean solicited more than $2 million in stock purchases
Geoffrey S. Berman announced guilty plea of Keith Orlean on September 26, 2019
Keith Orlean offered stock in valueless companies through false representations
Keith Orlean was sentenced by U.S. District Judge Vernon S. Broderick
Defendants made false representations about Digital Donations Technologies, Inc. IPO valued at approximately $300 million
Keith Orlean considered private sale of company for more than $1.5 billion
Keith Orlean faces maximum penalty of five years in prison for conspiracy to commit securities fraud
Keith Orlean faces maximum penalty of 20 years in prison for securities fraud

View original DOJ press releasejustice.gov

Extracted body text (4,984c)

Press Release Former CEO Pleads Guilty In Scheme To Defraud Elderly Victims In The Sale Of Worthless Stock Thursday, September 26, 2019 Share FacebookLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. XLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. LinkedInLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. Email For Immediate Release U.S. Attorney's Office, Southern District of New York Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today that KEITH ORLEAN, a/k/a “Jack Allen,” pled guilty to participating in a scheme to target elderly persons to solicit purchases of stock in a series of valueless companies through a variety of lies and misrepresentations. ORLEAN pled guilty to one count of conspiracy to commit securities fraud and one count of securities fraud before U.S. District Judge Vernon S. Broderick. Manhattan U.S. Attorney Geoffrey S. Berman said: “As he admitted today, Keith Orlean purported to offer elderly victims time-sensitive investment opportunities. In actuality, he was selling victims a package of false promises that yielded profit only for him and his co-defendants. Orlean now awaits sentencing for his predatory practices.” According to the allegations contained in the Complaint, the Indictment, and statements made in related court filings and proceedings:[1] For several years, ORLEAN and his co-defendants operated a fraudulent scheme in which a salesman named “Mike Palmer” would call elderly persons on the phone and offer them what he claimed was a time-sensitive opportunity to buy stock in certain companies. In fact, there was no “Mike Palmer,” and the salesman was actually one or the other of ORLEAN’s two co-defendants, who were taking turns using the fake alias. The purported time-sensitive investment opportunity was also fabricated by the defendants, as the companies in which they solicited investments were actually companies under their control. In one intercepted phone conversation, Co-defendant-1 described to ORLEAN his strategy for a successful investor sales pitch as: “You ram it down their fucking throat.” In another intercepted call between Co-defendant-1 and ORLEAN, upon learning that a particular victim investor died, Co-defendant-1 remarked: “I knew I should have pulled the last $10,000 out of him.” The most recent version of the defendants’ phony sales pitch included false representations about an impending initial public offering, or “IPO,” for their company, Digital Donations Technologies, Inc. For example, in April 2018, one of the defendants assured a victim investor that “our company is doing great,” that the company had an offer for an IPO valued at approximately $300 million, and that defendant KEITH ORLEAN was considering a private sale of the company for more than $1.5 billion. In truth, however, the defendants knew that the company had little or no actual commercial value and that no such IPO or sale was taking place. The Federal Bureau of Investigation ("FBI") estimates that since April 2014, the defendants have convinced more than approximately 50 elderly persons to purchase stock in companies controlled by one or more of the defendants based on false representations. The defendants appear to have solicited more than $2 million in stock purchases from victims. * * * ORLEAN, 61, of Dix Hills, New York, pled guilty to one count of conspiracy to commit securities fraud, which carries a maximum penalty of five years in prison, and one count of securities fraud, which carries a maximum penalty of 20 years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge. ORLEAN is scheduled to be sentenced before Judge Broderick on January 10, 2020, at 3:00 p.m. Mr. Berman praised the outstanding work of the FBI. The prosecution of this case is being overseen by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Robert Boone and Andrew Thomas are in charge of the case. [1]Links to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. As for ORLEAN’s co-defendants, the description of the charges set forth herein constitute only allegations. Updated September 26, 2019 Topic Securities, Commodities, & Investment Fraud Component USAO - New York, Southern Press Release Number: 19-310

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