The Securities and Exchange Commission has charged a Long Island, N.Y.-based concrete form company and its chief executive in a scheme that allegedly peddled fraudulently issued stock shares to unwitting investors.
The SEC charged Alternative Green Technologies Inc. of Uniondale, along with CEO Mitchell Segal, business partner Howard Borg, stock promoters David Ryan, Vikram Khanna of Northridge, Calif.-based Panascope Capital and Joseph Meuse of Virginia-based Belmont Partners.
According to the SEC's complaint, filed in U.S. District Court for the Southern District of New York, AGTI and Segal, an attorney licensed to practice in New York, submitted false documents to a transfer agent and an attorney, who relied on them to conclude that shares of AGTI could legitimately be issued.
The SEC complaint also claims that Meuse and his company fabricated and backdated documents to facilitate sales of free-trading shares of Alternative Green Technologies.
Alternative Green Technologies, through its subsidiary, Reddiform Worldwide, engages in the manufacturing, sales, marketing, distribution and installation of insulated concrete forms used for poured concrete or cement block, according to an online company profile. The company was formerly known as Niteagle Systems and changed its name to Alternative Green Technologies in December 2008.
"Shell packagers who buy and sell public companies for use by fraudsters have no rightful place in our markets," said David Rosenfeld, associate director of the SEC's New York Regional Office. "These shell packagers not only sold the shell company, but created the false documents necessary to cause the transfer agent to issue shares that should never have been sold to the public."
Borg, Khanna and Panascope Capital have agreed to settle the charges against them without admitting or denying the allegations in the SEC's complaint. Khanna and Panascope Capital agreed to pay $81,477 to settle the charges and Borg agreed to pay $35,264 and surrender for cancellation more than four million shares of Alternative Green Technologies stock that were illegally issued. The settlements are subject to court approval.
The SEC's complaint also seeks permanent injunctions and disgorgement against all defendants and a financial penalty against Alternative Green Technologies, Segal, Belmont Partners, Meuse and Ryan. The commission is also seeking officer, director and penny stock bans against Segal and Meuse. The complaint also names several relief defendants for the purposes of recovering proceeds they received from the illicit stock sales.