A Texas businessman, Philip Verges, has been indicted by a federal grand jury in Dallas for his involvement in a fraudulent scheme that affected at least five publicly traded companies and led to over $200 million in investor losses. The indictment, which was returned yesterday, alleges that Verges, 59, from Dallas, orchestrated the scheme from January 2017 to August 2022, deceiving the investing public by hiding his control over these companies.
Court documents reveal that Verges appointed friends as nominees to conceal his involvement and entered into sham consulting agreements with the companies. These agreements enabled the execution of convertible notes at a significant discount to the market value. Verges is accused of inflating share prices and trading volumes through false press releases and financial statements. He then allegedly sold the convertible notes to intermediaries who would convert them into shares, sell them at a profit, and share the proceeds with Verges. The total losses to investors are estimated at approximately $211 million.
Verges faces charges of securities fraud and money laundering. The securities fraud count carries a maximum sentence of 20 years in prison, while each money laundering count could result in up to 10 years in prison. Sentencing will be determined by a federal district court judge, taking into account the U.S. Sentencing Guidelines and other statutory factors.
The announcement of the indictment was made by Principal Deputy Assistant Attorney General Nicole M. Argentieri, who leads the Justice Department’s Criminal Division, and Gregory D. Nelsen, the Special Agent in Charge of the FBI Cleveland Field Office. The FBI is conducting the investigation, and Trial Attorneys Brandon Burkart and Matt Kahn of the Criminal Division’s Fraud Section are prosecuting the case.
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