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Clearing Penny Stock Certs through Panama

23 Jun Clearing Penny Stock Certs through Panama

 

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It is no secret that in recent months it has been getting harder and harder for promoters to get stock certificates cleared for the penny stocks that they are involved in setting up and promoting.  Many of the old penny stock clearing firms are now no longer willing to touch OTC stocks. 

It has been rumored for months that as a way to solve this problem, a new clearing firm was being set up that would be used for clearing penny stock certs through Panama and that this firm would be very friendly to these stock promoters.

Recently a confidential source disclosed information to me about Joseph Anthony Padilla, formerly of Scottsdale Capital, being involved in setting up a new company in Panama called Sterling Securities Group.

 

More about Joseph Anthony Padilla

Joseph Anthony Padilla (CRD# 2203872) had been a registered broker since 1992, but has really made a name for himself since starting Scottsdale Capital in 2007.   It was believed by many that Padilla was intimately involved with two big name promoters, Skymark and Awesome Penny Stocks.  It is well documented in litigation that Padilla has been involved in selling unregistered certs and was intimately involved in helping promoters in the Rudy Nutrition pump&dump scheme.

On March 23, 2009, FINRA brought a cause of action against Joseph Anthony Padilla and his partner Andrea M Ritchie for selling unregistered shares.  Joseph Padilla was charged with the unlawful sale of unregistered securities of one issuer while he was associated with Empire Financial Group Inc through his Carlsbad, California office in 2005.  Both Padilla and Ritchie were charged with the unlawful sale of unregistered securities of five issuers while they were associated with Cambria Capital Advisors Inc through their Carlsbad, California office in 2006.

The litigation found here discloses that Padilla sold $1,392,709 worth of unregistered stock in VMT Scientific Inc (VMTF) in 2005 while at Empire Financial Group Inc. 

The FINRA litigation discloses that Padilla and Ritchie also sold unregistered securities in First Pet Life Inc (FPLF), Sustainable Power Corp (SSTP), Pearl Asian Mining Industries (PAIM), eHolding Technologies (EHDN), and Aladdin Trading & Company (ALDI).

The FINRA ended up suspending both Padilla and Ritchie for a 6 month period.  Padilla was ordered to pay a fine of $132,701. Ritchie was ordered to pay a fine of $12,891.

 

More about the VMT Scientific Inc Scam

Josephy Anthony Padilla was not the only one that got in trouble for the selling of unregistered VMTF shares.  The SEC brought litigation against the two individuals that created the VMTF pump&dump scam to sell those unregistered shares, Daniel Kaiser and Stephen Roebuck.  The Court House News Service gives us a nice outline of how the scam went down.

VMTF was a dead shell company that was taken over by Daniel Kaiser and Stephen Roebuck to promote a device called the "VasCir System" that they claimed, without credible medical or scientific support, stimulates blood flow, expands vascular tissue and promotes vascular tissue growth.  Kaiser and Roebuck claimed the device could prevent 100,000 diabetes-related amputations a year.

Kaiser was issued a patent in 2000 for the device, then called "Stimulations VII," with which women allegedly could enlarge their breasts permanently by wearing a self-sealing vessel for several days while attached to a vacuum pump. Kaiser even claimed the device could help re-grow breasts that were removed by mastectomy, the SEC says. He formed a company called New Womyn Inc. to market it. But Iowa's attorney general sued after a consumer complained, and an Iowa court entered a default judgment against Kaiser and ordered him to shut down. The Iowa Supreme Court affirmed the decision on May 12, 2004, noting in its opinion that a Food and Drug Administration expert testified at trial that a "breast pump similar to Stimulations VII was on display in the public lobby of the FDA building in a collection of what the agency labeled 'quack devices.'"

In July 2003, with an appeal pending before the Iowa Supreme Court, Kaiser formed another company, Vacuum Medical Technologies, in yet another attempt to exploit his 'tissue-enlargement' patent.

In 2005, Kaiser met Roebuck, who offered to help raise $2 million to $3 million for Vacuum Medical Technologies. Roebuck outlined how he would merge Vacuum Medical Technologies with VMT Scientific Inc., another defunct shell corporation, take control of unrestricted shares, pump up stock prices, then sell the shares to generate $2 million to $3 million in profits, the SEC claims.

In the merger, VMT agreed to pay "shareholders" of Vacuum Medical Technologies 120 million new restricted common voting shares of the company. Those shareholders were Kaiser and Roebuck, who each got half. VMT then performed a reverse split of 1 share for every 75 old shares, and increased its authorized outstanding shares to 500 million.

Meanwhile, the SEC says, Kaiser and Roebuck created a Web site and issued several press releases to create buzz for their renamed device, now called "VasCir System," with unfounded claims that that its "revolutionary technology ... has already driven the need to file 10-plus additional patent applications ... with many more to come," the lawsuit states.  They compared the company's growth potential to that of Microsoft and Apple, according to the complaint. Roebuck hired a stock promoter, who in turn hired three more stock promoters, who then hired at least two more stock promoters, in July or August 2005.

Between October and December 2005, the company's stock price reached a high of 45 cents a share, with an average daily trading volume of 1 million shares. It sold nearly 9 million shares on Nov. 30, 2005.

Roebuck sold nearly 1.4 million shares for more than $790,000 through accounts in Panama, Turks and Caicos Islands and the Cayman Islands, according to the SEC.  Roebuck then transferred $300,000 to the new company, and Kaiser used it to pay business expenses and his $81,491 salary and reimburse expenses.

On Dec. 6, 2005, attorneys for the company's court-supervised custodian ordered it shut down. The duo complied three days later.  But Roebuck wasn't finished, the SEC says. He continued to dump his shares, and between Dec. 14, 2005 and July 20, 2006, sold 7.12 million shares through a Panamanian account, receiving proceeds of $202,889.

The individual involved in helping Roebuck and Kaiser dump all that unregistered stock was Joseph Anthony Padilla.

 

Joseph Padilla and Andrea Ritchie get busted again

On December 16, 2011, Joseph Padilla and Andrea Ritchie were named in SEC litigation for their role in helping Rudy Nutrition (RUNU) insiders sell millions of dollars worth of unregistered stock.  Read more here.

According to the SEC Complaint, a stock promoter named Stephen DeCesare put the RUNU scheme together.  He collaborated with the officers of RUNU including Daniel Ruettiger, Rocco Brandonisio, and Kevin S. Kaplan to engage in the public distribution of stock.  DeCesare organized a stock promotion campaign with the assistance of Pawel Dynkowski, Chad Smanjak, Gregg Mulholland, and others.

With the help of disbarred attorney, Kevin Quinn, and disbarred attorney, Joseph Saranello, DeCesare and his promoter crew moved millions of shares into nominee accounts located in places like Panama to be sold during the paid promotion with the help of brokers like Padilla and Ritchie through their company Scottsdale Capital.  Padilla's role in the RUNU scheme also include him using a business entity that he and Gregg Mulholland  created in Nevada called Global Media Partners to set up a brokerage account at Thomas Anthony & Associates Inc to participate in the share selling scheme.

As a result of the RUNU litigation, Joseph Padilla was ordered to pay $197,427 in disgorgement, a $100,000 fine, and prejudgement interest of $18,428.  On March 29, 2012, Joseph Padilla was also barred by the SEC from association with any broker, dealer, investment adviser, and municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization for a period of 3 years with a right to reapply after the 3 years if over.

On April 11, 2013, because Padilla failed to pay his fines and disgorgement, Joseph Padilla's FINRA registration was revoked.

 

Digging into Sterling Securities Group

On February 17, 2012, somebody named Militza Miro registered a new domain at sterlingsecuritiesgroup.com.  The registration was purchased through the Carlsbad, California branch of 101domain.com.  Carlsbad, California has been the main base of Joseph Padilla for many years.

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sterlingsecuritiesgroup.com forwards to ssg.com.pa.   

Through the new Sterling Securities Group website, Sterling offers all kinds of trading services for its clients.

Militza Miro is also known as Militza Miro de Torm

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Militza Miro de Torm registered a website for a company called Market Advisory Group Panama (MAG Panama) in 2011. 

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Along with her team of Francisco Torm Forero, Juan Francisco Torm Miro, and Abdiel Vergara Dominguez, Militza Miro de Torm offers legal and accounting services for Broker-Dealers.

Here is a LinkenIn page for Juan Francisco Torm Miro.

The group has a Panamanian entity together called Tormiro S.A. that uses attorney, Alberto Elias Fadul Fleckner, as a registered agent.

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Militza Miro de Torm can also be linked to another Panamanian entity called Trading and Clearing International Corp.

A closer look at the Sterling Securities Group website gives us one more name linked to this group, National Advisors Corporation.

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National Advisors Corporation is listed as a registered broker in the Panama brokerage records previously doing business as Sterling Financial Group Inc.  The attorney for the company is Alberto Elias Fadul Fleckner.  The principal executive is Militza Miro de Torm, but most interesting of all is that the company lists its website as vfinance.com/investments.

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vFinance is most commonly known as market maker VFIN.  vFinance is headed by Billy Groeneveld out of West Palm Beach, Florida.  Billy Groeneveld also heads another brokerage called Equity Station Inc which is a division of vFinance Inc.  The Panamanian vFinance website offers some very interesting services including confidential equity trading (including penny stocks) and financing opportunities through venture capitalists and angel investors.

vFinance Inc/Equity Station list 3 registered brokers working out of their Panama branch.  Our previously mentioned attorney, Alberto Elias Fadul, our previously mentioned principal officer, Militza de Torm, and Robert Esteban Castillero.

What all this seems to hint at is that somebody sought out the services of the VFIN Panama based crew to help them set up a new company in Panama called Sterling Securities Group.  The Sterling Securities Group website is very vague about who is involved running the company.  The website lists only one name, Anthony Castro.

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Here is a LinkedIn page for Anthony Castro.  Among his experience he lists a short stint at Spartan Global Securities and MWM Securities in 2013 and a current position as a compliance officer with Arena Advisors.

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Spartan Global Securities was opened in 2010 by a Canadian citizen named Salim Rana.  According to the old company website which has since been taken down, Spartan offered a full service Brokerage Firm licensed and regulated by the Securities and Exchange Commission of Panama under resolution CNV 304-10.  Spartan Global Securities closed its doors in 2012 when an investigation was started into the practices of the company.  More information about that situation here.  Salim Rana is best known as the founder of Li-Ion  Motors Corp (LIMO) which was twice investigated by the SEC because of stock manipulation schemes.  LIMO got halted by the Canadian regulators.  MWM Securities Inc is another Panama based brokerage firm.  Their website can be found here.

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Obviously, the people really behind the formation of Sterling Securities Group are meant to remain a secret.  My confidential source tells me that it was now banned broker, Joseph Anthony Padilla, that opened Sterling Securities Group through a front against his sentencing orders with the help of a financial backer.  Padilla has long been a friend of the stock promoters and Sterling Securities Group may just be the next chapter in this friendship.

 

 

 

 

3 Comments
  • Robert Johnson
    Posted at 12:58h, 28 August Reply

    Great Reporting. These scumbags have destroyed the start up markets. Do the names Jason & Matt Schall ring any bells? How about Bennington Law Firm?

  • alive
    ALiVE
    Posted at 09:42h, 15 September Reply

    great work ~

  • Jeffrey Martin
    Posted at 12:27h, 26 July Reply

    These scumbags ripped my client off of 11,000,000 shares of CHSO. Dropped from .16 to .02 in three says.

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