Florida Resident Pleads Guilty To Conspiracy, Tax Offenses

ORLANDO, FL — Damian Delgado has pleaded guilty and waived his right to be indicted on charges of conning investors into purchasing securities by making false and misleading representations, causing the price of the securities to become falsely inflated, according to the U.S. Attorney’s Office for the District of Connecticut. Delgado’s personal gain from the scheme — known as a "pump and dump" – was more than $346,000, the court said in a news release.

According to court documents and statements made in court, between approximately 2009 and July 2016, Delgado — also known as "Michael Neumann" — conspired with others to defraud investors through the stock pump and dump scheme. (for more Orlando news and breaking alerts, please subscribe here.

Delgado, 44, and his co-conspirators convinced investors to purchase securities by making false and misleading representations in calls, emails and news releases concerning the securities and the issuing companies, which caused the price of those securities to be falsely inflated. The issuing shell companies in the pump-and-dump scheme had virtually no legitimate business activities and were were controlled by Lieberman and others, the court said.

They included Terra Energy Resources Ltd. (stock symbol “TRRE”); Mammoth Energy Group, Inc. (stock symbol “MMTE”), a company that later became Strategic Asset Leasing Inc. (stock symbol “LEAS”); Trilliant Exploration Corporation (stock symbol “TTXP”); Hermes Jets Inc. (stock symbol “HRMJ”), which later became Continental Beverage Brands Corporation (stock symbol “CBBB”); Dolat Ventures, Inc. (stock symbol “DOLV”); and Fox Petroleum, Inc. (stock symbol “FXPT”), according to the court.

Delgado used pseudonyms when conning investors, in order to conceal his prior felony convictions and his permanent bar by the Securities and Exchange Commission from participating in any offering of penny stocks, according to the news release.

After Delgado made the sales, some of his co-conspirators then sold their own preexisting positions in the securities at a profit, which caused the price of the securities to plunge, leaving investors with worthless and unsalable stock. Many investors lost millions of dollars.

Delgado pleaded guilty to one count of conspiracy to commit mail and wire fraud, which carries a maximum term of imprisonment of 20 years, and one count of tax evasion, which carries a maximum term of imprisonment of five years. He is scheduled to be sentenced on Aug. 30, 2017.

Delgado also will be ordered to pay restitution to his victims, as well as back taxes, interest and penalties to the IRS.

This ongoing investigation is being conducted by the Federal Bureau of Investigation, Internal Revenue Service – Criminal Investigation Division and U.S. Postal Inspection Service, with assistance from the Connecticut Department of Banking and the Hartford and Stamford Police Departments.

Photo Credit: Wikimedia Commons