Two Canadian stock promoters face up to five years in prison after admitting to a stock manipulation scheme that generated more than $17.2 million in illegal proceeds.

Michael Taxon and Itamar Cohen, both of Thornhill, Canada, pleaded guilty to conspiracy to commit securities fraud in the U.S. District Court, District of New Jersey ,this week. In a parallel action on Thursday, both men agreed to partially settle stock manipulation charges stemming from a U.S. Securities and Exchange Commission lawsuit.

Between April 2007 and June 2008, Taxon, Cohen, and others allegedly inflated the share prices of two microcap companies, Raven Gold Corporation and Kentucky USA Energy Inc., through extensive pump-and-dump schemes.

The schemes generated $17.2 million in illegal proceeds, of which Taxon and Cohen received approximately $2.4 million.

According to the criminal complaint, the conspirators obtained large blocks shares in the two companies then disseminated misleading promotional materials touting the stocks and encouraging others to purchase them.

In 2007, an eight-page, glossy mailer entitled “Stock Trend Report” and touting Raven Gold’s stock was sent to potential investors, claiming to be a “Special Edition for Premium Members” despite being created specifically for the scheme. Accompanying the mailer, the conspirators allegedly took out advertisements in trade publications and issued press releases to create an air of accountability.

In 2008, the SEC complaint claims the conspirators used a similar mailer for the Kentucky USA Energy Scheme, titled “Global Investor Watch,” containing false and misleading information about the company and its stock.

At the same time, Taxon, Cohen, and another conspirator allegedly engaged in a pattern of manipulative trading designed to create the false appearance of liquidity for the companies. In 2008, Taxon placed used overseas accounts to place and cancel successfully higher buy orders for Kentucky USA Energy stock at different brokers to walk up the stock price.