21 Oct 2020
Two felons and a former stockbroker who played legitimate stockbrokers are the latest charged in a $4.9 million penny stock scam swirling around Palm Beach Gardens-based NIT Enterprises.
The Securities and Exchange Commission charged Hollywood’s Mason Newman, Boca Raton’s Christian Baquerizo and Fort Lauderdale’s Kevin Cardenas with fraudulently selling $1.4 million of NIT stock to primarily senior citizens, from 2015 through November 2019. They’re accused of lying about the company, about the company’s prospects and about how much of their investment would be going toward broker commissions.
Perhaps customers would recognize Baquerizo, Cardenas and Newman better if connected to the aliases the SEC says they employed in case anyone decided to run their actual names by Google or background check services.
- The SEC says Baquerizo used “Teddy Stone” to cover a conviction on an aggravated assault charge in 2000, and he made $150,692 in commissions.
- Cardenas, or “Jacob Rosenthal,” got probation after his conviction on burglary and grand theft charges in 2015. The SEC says he made $121,690 in commissions.
- Newman, unlike his alleged cronies, had been a licensed broker. He served a one-year suspension and paid $10,000 when accused of sales practice violations in 2005. Getting charged with acting as an unregistered broker-dealer in a 2016 securities sale resulted in $179,600 in fines, penalties and judgments (some of which he still owes) for Newman as well as being barred from brokering penny stocks.
To keep this from his NIT investment targets, the SEC says Newman gave his name as “Barry Weiss.” By the SEC’s count, “Barry Weiss” received nearly $217,000 in commissions.
Two other SEC-barred brokers, Miami’s Jason Ganton and Boca Raton’s James Cleary were charged with NIT CEO Gary R. Smith; NIT Enterprises, Inc; NIT Enterprises (Florida); and NIT Enterprises (Delaware) last year for their roles in the fraud. The SEC gained default judgment and asset freezes against all of the above.
According to the various complaints, Smith paid the people who acted as brokers to cold-call people with a script in hand that claimed “NIT was close to developing and producing radiation protective materials using an innovative technology.” Also, NIT “was garnering much interest from other companies because it would yield significant profits.”
That leads to the dangling of an Initial Public Offering. Scam victims allegedly were told buying into NIT now would get them in before the stock doubled or tripled in price after the IPO.
By David J. Neal, Miami Herald, 19 October 2020
Read more at Miami Herald
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