Seven people were sentenced to prison Monday in relation to a more than $50 million securities fraud “pump-and-dump” scheme, according to Acting U.S. Attorney Jennifer B. Lowery.
Carolyn Price Austin, 67, Andrew Ian Farmer, 43, Thomas Galen Massey, 51, Eddie Douglas Austin Jr., 71, and Charles Earl Grob, 41, John David Brotherton, 62, and Scott Russell Sieck, 62, all admitted to their involvement in a conspiracy to commit fraud in microcap securities.
Austin, Farmer, Massey, Eddie and Grob are all from Houston. Brotherton is from League City and Sieck is from Winter Park, Florida.
On Monday, U.S. District Judge Vanessa Gilmore sentenced Farmer to 12 months in federal prison and one year of supervised release. In handing down the sentence, the court noted the large sum of money lost by the victims in the case and that there were “some people that lost all their money.”
Previously, U.S. District Judge Gilmore ordered Farmer to serve a sentence of 72 months. Brotherton, Grob and Massey were ordered to serve 60 months, and three years of probation, while Eddie Austin and Sieck both were ordered to serve 36-month terms.
All seven suspects must also pay restitution to the victims of their scheme. Farmer and Sieck were each ordered to pay $8 million, while Eddie Austin must pay $6.6 million. The court ordered Grob and Massey to pay $4.5 and $1 million, respectively, while Brotherton must pay $6.2 million. The court held open the amount of restitution Carolyn Austin will be required to pay to enable the parties to submit an agreed-upon amount.
Farmer, Eddie Austin, Sieck, Brotherton and Grob were further ordered to forfeit additional funds to the United States in amounts ranging from $242,907 to $6 million.
During the course of the conspiracy, court records show the suspects obtained control of the stock of numerous companies, then “pumped up” the price of the stock through false and misleading press releases and fraudulent trading techniques. They then “dumped” their shares of stock onto the market for a significant profit.
Farmer and Brotherton are in custody serving their sentence at a U.S. Bureau of Prisons facility. Eddie Austin, Carolyn Austin and Sieck were permitted to remain on bond and voluntarily surrender at a later date. Grob has completed his sentence and is currently on supervised release.
Source: www.click2houston.com
