Two Long Islanders were among nine men indicted Tuesday in a $131 million scheme to sell investors worthless stock in an LED lighting company “through a dizzying round of unauthorized trades and deceptive promotions,” Brooklyn federal prosecutors said.
Richard Brown, 37, of Huntington and Christopher Castaldo, 44, of Glen Head are accused with seven others of engaging in a scheme between December 2009 and April 2015 to defraud investors in ForceField, an LED lighting company, by “artificially controlling the price and volume of traded shares,” said Robert Capers, U.S. attorney for the Eastern District of New York, in a statement.
“They took a company with essentially no business operations and little revenue and deceived the market and their clients into believing it was worth hundreds of millions of dollars,” Capers said.
“In the end, the deceived investors were left holding the empty bag.”
Brown was one of five “corrupt brokers” who purchased ForceField stock in his clients’ brokerage accounts in exchange for a kickback from the company, authorities said.
Castaldo, the chief executive of the Glenwood Landing-based Stock Traders Press Inc., is accused of accepting kickbacks from the company for promoting its stock.
According to officials, Castaldo and other promoters “duped” more than 100 investors into purchasing upward of $6.2 million in ForceField stock.
All nine defendants are being charged with wire fraud conspiracy, securities fraud conspiracy, money laundering conspiracy and substantive securities fraud, according to the release.
Brown and Castaldo were arraigned Tuesday afternoon before Judge Vera Scanlon in federal court in Brooklyn and released on $250,000 bonds, officials said.