A lawyer from Merrick pleaded guilty in Brooklyn federal court on Wednesday to an $86 million stock manipulation scheme in 2013 in publicly traded CodeSmart Holdings Inc. and faces up to 5 years in prison.
Darren Ofsink, 48, admitted being part of a “pump and dump” conspiracy to twice drive up the price of shares in CodeSmart, a medical coding company, and then sell at a profit before letting the price collapse.
The government had alleged that Ofsink and co-conspirators used false news releases to pump up the price of the stock and then dumped their shares on unsuspecting and elderly investors before the price dropped. At one time, CodeSmart had a market capitalization of $86.3 million and $6,000 in assets, prosecutors said.
The government dropped charges that could have carried up to 20 years in prison, and Ofsink’s plea spared him from facing sentencing under federal guidelines of 188 to 240 months, based on the size of the manipulation, his lawyer said.
“Mr. Ofsink fully accepted responsibility for his fraud and he looks forward to putting this matter behind him,” said his attorney, Christopher Bruno.
Co-defendant Ira Shapiro, 56, of Congers, the former CEO of CodeSmart, also pleaded guilty on Wednesday to the same charge. Six of 10 co-defendants have pleaded guilty since charges were filed in July 2014.