U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23430 / December 16, 2015
United States v. Edward Laborio and Jonathan Fraiman, 12-cr-10238-FDS-JGD (District of Massachusetts)
Securities and Exchange Commission v. Edward M. Laborio, Jonathan Fraiman, Matthew K. Lazar, Envit Capital, LLC, Envit Capital Group, Inc., Envit Capital Holdings, Inc., Envit Capital Private Wealth Management, LLC, Envit Capital Multi Strategy Mixed Investment Fund I LP, Aetius Group PLC, and Aetius Group LLC, Civil Action No. 1:12-cv-11489-MBB, (District of Massachusetts, Complaint filed August 10, 2012)
Former Boiler Room Operator Found Guilty by Federal Jury in Massachusetts
The Securities and Exchange Commission announced today that on December 14, 2015, a jury in the federal court in Boston, Massachusetts, returned a guilty verdict against former Massachusetts resident Jonathan Fraiman in a criminal trial prosecuted by the Massachusetts U.S. Attorney. The jury found Fraiman guilty on one count of conspiracy and one count of mail fraud for his role in a boiler room scheme involving the sale of securities. The Commission previously charged Fraiman for the same conduct in a civil action. The scheme raised more than $4 million primarily from January 2008 through late August 2009 through the use of false promises and pressurized sales tactics with regard to the sale of securities in a group of related entities, most with the name "Envit," that were owned and controlled by Edward M. Laborio, including a non-existent hedge fund. Fraiman will be sentenced on March 10, 2016 by the Honorable F. Dennis Saylor, IV.
On August 10, 2012, the Commission charged Laborio, Fraiman, Matthew K. Lazar, and the Envit entities in federal court for their roles in the Envit boiler room scheme. On August 7, 2014, Fraiman was criminally indicted by a federal grand jury, and was arrested on August 27, 2014. Laborio, who was also charged in the indictment, was a fugitive and was found deceased in Barcelona, Spain earlier this year.
On October 8, 2013, the court in the Commission's civil action entered a judgment against Fraiman enjoining him from future violations of the antifraud provisions of the federal securities laws. On October 11, 2013, the Commission issued an Order barring Fraiman from any future association with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization, with the right to reapply after ten years. Fraiman consented to both the judgment and the Commission Order.
On November 27, 2013, the court in the Commission's civil action entered a judgment against Lazar, enjoining him from future violations of the antifraud provision of the federal securities laws. On December 11, 2013, the Commission issued an Order barring Lazar from any future association with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization, with the right to reapply after three years. Lazar consented to both the judgment and the Commission Order.
On November 18, 2014, the court in the Commission's civil action entered a final judgment by default against Laborio and the Envit entities, enjoining them from future violations of the antifraud and other provisions of the federal securities laws. The final judgment ordered civil penalties of $4 million against Laborio and each of the Envit entities, and ordered Laborio and the entities to disgorge, jointly and severally, $5,006,590 in ill-gotten gains plus prejudgment interest. Laborio's judgment also barred him from serving as an officer or director of a public company and from participating in any offering of penny stock.
The SEC thanks the U.S. Attorney's Office for the District of Massachusetts for its efforts in prosecuting the case.
For more information, see Exchange Act Release No. 34-59900 (May 12, 2009) [Order suspending trading in Envit Group securities]; Initial Decision Release No. 385 (August 13, 2009) [Initial decision revoking registration of Envit Group securities]; Exchange Act Release No. 60658 (September 11, 2009) [Notice of final decision revoking registration of Envit Group securities]; Litigation Rel. No. 22444 (August 10, 2012) [Civil Complaint]; Litigation Rel. No. 22836 (October 8, 2013) [Fraiman settlement]; Exchange Act Release No. 70678 (October 11, 2013) [Fraiman Order]; Litigation Release No. 22881 (December 2, 2013) [Lazar settlement]; Exchange Act Release No. 71043 (December 11, 2013) [Lazar Order]; and Litigation Rel. No. 23140 (November 24, 2014) [Laborio and Envit final judgment].