U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23441 / January 6, 2016
United States v. Ronald Lawrence Schuman, Criminal Action No. 1:14-cr-10053-MLW (D. Mass. Feb. 27, 2014)
Corporate Officer Sentenced for Fraudulent Kickback and Market Manipulation Scheme
The Securities and Exchange Commission announced that Ronald Schuman, the former President and Chief Executive Officer of a publicly traded company, was sentenced recently by the United States District Court for the District of Massachusetts in a criminal case filed by the Massachusetts U.S. Attorney on February 27, 2014 alleging he used kickbacks to trigger investments in the securities of Florida-based Connectyx Technologies Corp., a thinly-traded stock. The Commission filed related charges against Schuman on June 1, 2015.
Schuman is among numerous defendants who have been alleged to have engaged in criminal activity in the midst of an undercover FBI operation. According to the charges filed in U.S. District Court in various cases since December 2011, the schemes involved secret kickbacks to an investment fund representative in exchange for having the investment fund buy stock in certain companies; the kickbacks were to be concealed through the use of sham consulting agreements. What the insiders and promoters did not know was that the purported investment fund representative was actually an undercover FBI agent.
In a judgment entered on December 29, 2015, Schuman was sentenced to one year of probation and was ordered to forfeit $22,500 after pleading guilty on May 20, 2014 to one count of conspiracy to commit wire fraud.
On June 1, 2015, the Commission filed charges of securities fraud against Schuman, alleging that he used kickbacks to engage in fraudulent financing transactions involving the microcap company of which he was President and CEO. In that matter, Schuman consented to cease and desist from further violations of the antifraud provisions of the Securities Exchange Act of 1934, be prohibited from acting as an officer or director of certain public companies for a period of five years, and be barred from participating in any offering of penny stock with the right to reapply after five years.
For further information, see Exchange Act Release No. 75082 (June 1, 2015) (settled order instituting proceedings).