Former Broker Admits to Securities Fraud

Another former broker pleaded guilty Friday in federal court to securities fraud, money laundering and other charges involving the illegal manipulation of stock.

Stephanie Lee, of St. Petersburg, Fla.,  was among 16 defendants who were charged in July 2017 in connection with a $147 million illegal stock manipulation scheme. She is the 13th defendant to plead guilty.

As alleged in court papers, between August 2013 and July 2017, Lee and her co-defendants engaged in a scheme to defraud investors, many of them elderly, through the use of high-pressure call centers located at Elite Stock Research of Plainview and My Street Research of Melville. Lee and her co-defendants artificially controlled the trading price and volume of publicly traded companies by, among other things, retaining Elite and My Street Research to use pressure tactics, material misrepresentations and omissions to induce victims from around the country to purchase stock.

Although the victims believed they were buying stock on the open market, Lee and her co-defendants secretly coordinated the trading so that the victims purchased shares at inflated prices that were owned and controlled by Lee and certain co-defendants. Following her arrest, Lee gave false information to the FBI agents who interviewed her in connection with the alleged fraud.

A 14th defendant, Michael Watts, was convicted after trial in October 2019. Four defendants have been sentenced for their roles in the scheme:  Ronald Hardy was sentenced to 10 years’ imprisonment; Dennis Verderosa was sentenced to six years’ imprisonment; McArthur Jean of Dix Hills was sentenced to four years’ imprisonment; and Emin Cohen was sentenced to two years’ imprisonment.

The top count to which Lee pleaded guilty carries a maximum sentence of 20 years’ imprisonment. The plea proceeding took place before United States District Judge Joanna Seybert.

Richard P. Donoghue, United States Attorney for the Eastern District of New
York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the guilty plea. 

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