The Securities and Exchange Commission today charged a known securities fraudster with conducting a new scheme since his release from prison by using fake names to solicit investors while hiding his criminal past.
An SEC examination revealed that Edward Durante, who served a 10-year prison term following his securities fraud conviction in 2001, has again been soliciting investors under such aliases as Ted Wise, Efran Eisenberg, and Anthony Walsh. The SEC alleges that Durante defrauded investors by selling shares of a shell company he secretly controlled and falsely telling them stock sale proceeds would be used to fund the company’s operations when they were actually tapped for other purposes including Durante’s personal use.
In a parallel action, the U.S. Attorney’s Office for the Southern District of New York today announced criminal charges against Durante.
“As alleged in our complaint, Durante shamelessly peddled worthless stock under phony names to steal millions of dollars from unsuspecting investors,” said Andrew M. Calamari, Director of the SEC’s New York Regional Office.
According to the SEC’s complaint filed in federal district court in Manhattan:
- Durante began laying the groundwork for his next stock fraud while still in prison, using the name Anthony Walsh to negotiate his acquisition of the shell company VGTel Inc.
- From 2012 to 2014, Durante defrauded at least 50 relatively inexperienced investors through at least $11 million in sales of VGTel stock.
- Durante held sales meetings with investors under his Ted Wise alias in such locations as San Diego and Tewksbury, Mass.
- Durante separately bribed investment advisers to steer clients toward VGTel stock purchases without disclosing they had received money from Durante to do so.
- Durante also engaged in matched trading of VGTel stock with a stockbroker to artificially control the stock’s market price.
The SEC's complaint charges Durante with violating Section 17(a) of the Securities Act of 1933 and Sections 9(a)(1) and 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5.
The SEC’s investigation was conducted by Gerald Gross, James Hanson, Elizabeth Baier, and Edward Janowsky with assistance from Steven Vitulano and Terrence Bohan. The litigation will be led by Paul Gizzi and Mr. Hanson. The case is being supervised by Sanjay Wadhwa. The SEC appreciates the assistance of the U.S. Attorney’s Office for the Southern District of New York, the Federal Bureau of Investigation, and the U.S. Postal Inspection Service.