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Farmingdale man pleads guilty to securities fraud conspiracy, U.S. attorney says

Anthony Vassallo, left, leaves federal court in Brooklyn

Anthony Vassallo, left, leaves federal court in Brooklyn after being arraigned on July 12, 2017. Credit: Jeff Bachner

A Farmingdale man who managed a sales call center pleaded guilty Friday in connection with a $147 million pump-and-dump stock scheme that has resulted in 10 other guilty pleas, federal officials said Friday.

Anthony Vassallo, 55, faces a maximum of five years in prison when he is sentenced for conspiracy to commit securities fraud in connection with the sale of stock in two publicly traded companies, CES Synergies and First Choice Health Care Solutions, according to the U.S. attorney's office for the Eastern District of New York, which covers Long Island. 

For several years, Vassallo and his co-defendants manipulated prices of the stock, cheating investors across the nation, many of them elderly, out of millions of dollars. Vassallo managed the Plainview-based Elite Stock Research, a "boiler room" operation in which high-pressure sales people cold called potential investors, and later worked at the Melville-based My Street Research and other boiler room companies, federal officials said. 

The 16 defendants, most of them from Long Island, were arraigned in July 2017 on an indictment that said the call centers were used to make hundreds of thousands of calls between 2014 and 2017. The defendants pushed penny stocks by pumping up their value with lies, including telling victims that the Walt Disney Company planned to buy in, but in reality, the stock's prices were already artificially high, prosecutors had said at the time.

Vassallo and his accomplices fraudulently concealed their control of the two companies' shares by holding the shares under the names of other people and entities, authorities said. 

The 10 other defendants who have pleaded guilty are awaiting sentencing, officials said.

In August, two Suffolk men in the case pleaded guilty to conspiracy to commit securities fraud and other crimes. Ronald Hardy, 43, of Port Jefferson, and McArthur Jean, 34, of Dix Hills, admitted that from April 2014 to July 2017 they and others defrauded investors by artificially driving up stock prices, then selling shares they already owned for a profit. 

Hardy, a manager of the boiler room that operated in Melville, pleaded guilty to conspiracy to commit securities fraud, conspiracy to commit wire fraud, conspiracy to commit money laundering and five counts of securities fraud. He faces up to 20 years in prison on the most serious charge. 

Jean, a cold-caller at the same boiler room, pleaded guilty to one count of conspiracy to commit securities fraud. He faces up to five years in prison.

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