The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

US regulators have moved to freeze three Bahamian bank accounts owned by the Paradise Island “Raider” as they bid to seize $21.1m in “ill-gotten gains” generated by a $100m multinational securities fraud ring.

“Raider” was allegedly the code-name for Domenic Calabrigo, 29, a Canadian permanent resident of The Bahamas who resided in Paradise Island’s One Ocean condominium complex, and who is accused of issuing false and misleading promotions to fraudulently inflate the value of stocks employed in a “pump and dump” market manipulation.

Calabrigo, who was arrested last week and brought before the Magistrate’s Court, has already waived his right to fight extradition to the US and southern New York federal court where the charges have been laid. He is facing both criminal charges brought by the federal authorities and a civil lawsuit filed by the Securities & Exchange Commission (SEC), the US capital markets regulator.

The SEC, whose action provides more details, on April 15 obtained a restraining Order and asset freeze against three Bahamian bank accounts alleged to be controlled by Calabrigo. One, in his personal name, was said to be held at CIBC FirstCaribbean International Bank (Bahamas), while the remaining two are shared between that bank and Scotiabank (Bahamas) in the name of a corporate entity, Trojan Technologies International.

The US regulator, alleging that Calabrigo and his circle made millions in illicit profits, claimed: “It appears from the evidence presented that defendant Calabrigo has obtained up to $21.1m in ill-gotten gains derived from his unlawful conduct.” It is aiming to freeze up to $39.6m worth of assets collectively in the possession of the Paradise Island resident and three fellow accused - Curtis Lehner, Hasan Sario and Courtney Vasseur.

“Pump and dump” schemes involve the perpetrators secretly obtaining control of a large block of shares in a public company, usually one that is a thinly-traded microcap on the so-called “pink sheets” or over-the-counter market. Using a variety of nominee entities to conceal their identity and ownership, they then “pump” or inflate the stock price via series of glowing promotions and press releases about the company’s performance and future stocks.

Then, when the time is right and share price sufficiently prices, the sell or “dump” their holdings on the market, running off with the profits and leaving other investors holding dead or worthless stock. The SEC is alleging that Calabrigo financed misleading and fraudulent promotions for four separate microcap stocks through an entity called Antevorta Capital Partners, which is domiciled in the British Virgin Islands (BVI).

“Calabrigo’s participation generally related to promotions, specifically for Blake Therapeutics; Drone Guarder, Vilacto Bio and Zenosense. Calabrigo was also associated with Antevorta, a group working through a British Virgin Island entity that also engaged in the manipulation of microcap stocks, often in concert with the defendants,” the SEC alleged.

“In May 2017, Calabrigo, through an associate, paid for a different stock promoter to promote Blake Therapeutics through Facebook and Google ads.” This activity was said to have netted the four accused some $5m in profits from selling 5.5m shares.

As for Vilacto Bio (VIBI), Trevor Donelan, an SEC investigator, alleged: “Bank records and records from Stock Promotion Firm B show that the firm commenced a promotional campaign touting VIBI stock beginning on October 30, 2017, and that this campaign was funded by Antevorta, which witnesses and documents confirm is associated with Calabrigo.

“These records reflect Antevorta paid over $1m to promote VIBI stock using landing page websites, promotional e-mails and other internet advertising campaigns between October 2017 and December 2018.”

A similar strategy was employed for Zenosense (ZENO). “Based on documents I reviewed and witness interviews, it is my understanding that defendants Lehner, Vasseur and Calabrigo were part of the group that controlled ZENO,{“ Mr Donelan alleged.

“Bank records and records from Stock Promotion Firm B show that the firm commenced a promotional campaign touting ZENO stock beginning in mid-February 2017, and that this campaign was funded by Antevorta, which witnesses and documents confirm is associated with Calabrigo.

“These records reflect Antevorta paid over $311,000 to promote ZENO stock using landing page websites, promotional e-mails and other Internet advertising campaigns between February 2017 and May 2017.” This continued with the final company, Drone Guarder.

“Bank records and records from Stock Promotion Firm B showed the firm commenced a promotional campaign touting Drone Guarder stock beginning on September 5, 2017, and that this campaign was funded by Antevorta, which witnesses and documents confirm is associated with Calabrigo,” Mr Donelan added.

“These records reflect Antevorta paid over $456,000 to promote Drone Guarder stock using landing page websites, promotional e-mails and other Internet advertising campaigns between September 2017 and March 2018.”