Man pleads guilty in internet securities fraud case
Source: The Age
Date: July 02, 2003
A man has pleaded guilty to sending out more than 9 million junk email messages as part of a business scheme that defrauded investors of more than $US100,000 ($A148,809).
At sentencing on October 6, K.C. Smith, 20, will face up to 20 years in prison and a $US5 million ($A7.44 million) fine on each of two counts of securities fraud. He pleaded guilty yesterday in US District Court.
Earlier, Smith agreed to pay $US107,510 ($A159,985) to settle a complaint with the Securities and Exchange Commission involving two internet scams he ran in 2002.
According to court records, in May 2002 Smith created a website for a fictitious enterprise called the Maryland Investment Club, which claimed to offer double-digit monthly returns on high-yield international tax-free investments.
Smith promoted the scam in about 6 million unsolicited bulk e-mail messages. According to the SEC, he received $US78,909 ($A117,424) from 26 investors.
Court records said Smith also created a bogus business called Kryer Financial in July 2002. He promoted it as a California-based "specialist international fund manager" dealing in gold and precious metals.
"In fact, the only operations of Kryer were conducted by Smith from his home in Tennessee," court records said.
Smith sent more than three million unsolicited e-mails out about Kryer and collected more than $23,000 from three investors.
Original article: http://www.theage.com.au/articles/2003/07/02/1056825431366.html
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