Report: International P&D (Pump-and-Dump) Securities Fraud Network

Date: January 6, 2023

Prepared by: Lee Pederson

Fraudsters
Individual
investors
Money Entity investors SEC
Laundering Promoters Focus on “capital formation”
Operations Registration statements

Market
Company
Market makers
BOD
Hedge funds Investment
C-Suite
Short sellers banks
Business/
Swap traders
Story

Information Cloud
SEC filings
Public Press releases
Investors Media reports
Analysts
Fake promotions
Internet

1
Section 1: Overview (page 2)
Section 2: SEC v Honig (page 3)
Section 3: International Money Laundering (page 4)
Section 4: The P&D Network (page 5)
Section 5: P&D Network Kingpins (page 7)
Section 6: The Existence of the P&D Network is Gradually Revealed (page 8)
Section 7: The 2017-2018 P&D at PolarityTE (page 10)
Section 8: Law Enforcement Actions Involving the P&D Network – Table (page 12)
Section 9: Examples of Individuals and Entities who are Connected to P&D Frauds at Multiple Companies / Multiple SEC Cases (page 19)

Section 1: Overview

This report describes an international P&D (Pump-and-Dump) Securities Fraud Network that has involved scores of fraudsters / defendants
and hundreds of public companies (stock issuers), with each company associated with one or more P&D securities frauds.1 The P&D Network
includes an extensive web of stock promoters and elaborate international communications and financial systems designed to disguise trades and
launder money relating to P&D frauds.2 Without openly acknowledging either the existence of the network or the interconnected nature of the many
SEC law enforcement actions involving the network, the SEC has already brought more than 40 enforcement actions related to this P&D Network.
The DOJ has filed at least 16 criminal cases related to the same Fraud Network. Between SEC civil cases, SEC administrative actions, DOJ criminal
cases and other enforcement actions, there have been at least 66 separate fraud cases brought against members of the Network (see the table below in
Section 8). The SEC has obtained tens of millions of dollars in settlements and judgements. A number of criminal sentences have been meted out.
Enforcement litigation in many cases is ongoing. Other cases of securities fraud involving the Network are currently under investigation by the SEC
and DOJ. Private civil actions, including securities frauds class action suits, are also ongoing (and in some cases settled).

The P&D Fraud Network is massive. According to the complaint in just one of the 40-plus SEC cases (SEC v Sharp), “Sharp and his
associates facilitated over a billion dollars in gross sales in hundreds of penny stock companies” … “from 2011 to 2019.”3 In another case filed
on November 17, 2022 (SEC v GEL Direct), the complaint says, “Between approximately June 2019 and May 2022, GEL executed more than
19,000 trades of more than 300 billion shares of stock of more than 400 issuers on behalf of approximately 60 customers. These trades generated
more than $1.2 billion of trading proceeds for GEL’s customers.” These two SEC cases, totaling about $2.2 billion, do not come even close to
including all the P&D transactions involving the P&D Network over the last decade.

1
The diagram on page 1 shows the arrangement of a somewhat typical pump-and-dump (P&D) securities fraud at a single company. There are
many variations among the hundreds of P&D’s that have been carried out within the Network.
2
The cases of SEC v Sharp and SEC v Bajic describes aspects of the offshore portion of the P&D Network from 2011 to 2019. (see table below)
3
https://www.sec.gov/litigation/litreleases/2021/lr25164.htm
2
 The Fraud Network is dispersed throughout the world. The vast majority of the companies involved are based in the U.S. and traded on U.S.
exchanges. However, there have been many foreign individuals and entities involved. Some trading may occur in foreign exchanges (e.g., Toronto
Stock Exchange, Tel Aviv Stock Exchange). Countries whose financial regulatory authorities have been credited by the SEC for their cooperation in
various P&D cases include Argentina, Bahamas, Canada (Alberta, British Columbia, Ontario and Quebec), Cayman Islands, Columbia, Curacao,
Cypress, Denmark, Dominican Republic, Dubai, Germany, Guernsey, Hong Kong, Italy, Japan, Jersey, Latvia, Liechtenstein, Lithuania, Malta,
Mauritania, Mexico, New Zealand, Panama, Serbia, Singapore, St. Lucia, Switzerland, United Arab Emirates and the United Kingdom.

Each of the hundreds of P&D frauds is different. Each has unique components and a unique story. However, all P&D’s share a few common
elements. First, the fraudsters have to obtain a significant number of shares or options in the company (the “issuer”). Then the fraudsters have to
manipulate the stock price to rise by promoting the company. Third, the fraudsters have to sell their shares at an artificially inflated price. These
elements require a coordinated effort between a large number of individuals for each separate P&D.

Fraudsters can also profit from selling a stock short and then manipulating or allowing the price to go down. This technique is sometimes
called short-and-distort (S&D), but S&D is not always an accurate descriptor of what really happens. If a stock has been manipulated upwards by
promotions, it is likely that the stock price will fall once the promotions stop. Thus, fraudsters can profit both on the P&D side when the stock price
goes up, and on the short side when the price goes down. The details a stock shorting operation are different than in a P&D, though many of the
same players may be involved.

The Fraud Network is interconnected but decentralized. No single individual or group has participated in all of the frauds. However, many
individuals and groups operating within the network have participated in multiple frauds.

Section 2: SEC v Honig

The SEC charged Phillip Frost, Barry Honig, and 18 other individuals and entities with securities fraud on September 7, 2018. The complaint
described P&D frauds at three companies: BioZone (now dba CoCrystal), MGT Capital and MabVax Therapeutics. The SEC has obtained 18
consents to judgment and $11.3 million in disgorgement, interest and penalties so far, with further amounts pending. Right after the SEC announced
the initial filing of the case, Barron’s Online published an article titled “SEC Charges Against Phillip Frost Might Just Be the Tip of the Iceberg” on
September 10, 2018.4 Much of the “iceberg” remains hidden, but new information has steadily emerged. In early 2011, Phillip Frost’s net worth was
estimated to be about $2.1 billion dollars. His reported net worth peaked at about $4.3 billion in 2015. Now it is estimated to be around $2.4 billion.
I suspect that his current net worth is really much higher than that. My theory is that Frost has been secretly manipulating stocks and trading from
offshore accounts since about 2015, and that he may have billions of dollars stashed away in Swiss and/or other foreign bank accounts in addition to

4
https://www.barrons.com/articles/sec-charges-phillip-frost-1536608366
3
his publicly known assets. I published a report outlining this theory in 2019.5 Since then, newly available information described in this report has
revealed more about the international character and money laundering aspects of the Securities Fraud Network.

Section 3: International Money Laundering

The involvement of Vancouver, BC resident Frederick Sharp in both the Panama Papers Network and the International P&D Securities Fraud
Network seems to be extremely significant. The Canadian media has covered this connection to some extent, while it has been mostly overlooked in
the US. A google search of - Fred Sharp SEC "Panama" – will produce links to a number of media stories (mostly from Canada). One example is an
Oct 5, 2021 Toronto Star article titled, “This man helped set up hundreds of offshore firms for rich clients. His case shows how Canada has ‘turned a
blind eye’ to cracking down on offshore tax schemes.”6
On August 4, 2021, the DOJ obtained an arrest warrant for Frederick Sharp. Sharp apparently has not appeared in his criminal case.7 The
DOJ announced criminal charges against both Sharp and Luis Carrillo in the same press release.8 On May 12, 2022, the SEC obtained a $52 million
default judgement against Sharp. A November 7, 2022 article in the Vancouver Sun carries the headline, “B.C. 'mastermind' of $1.3-billion stock
fraud challenges U.S. SEC claim.” The article describes how the SEC is trying to freeze Sharp’s assets in a British Columbia court case. Both the
SEC and the DOJ cases against Sharp have been sealed.

A July 25, 2022 article in the National Law Review9 comes the closest to describing Sharp’s role in the Fraud Network, though it does not
make the connection between Sharp and the Panama Papers. This article discusses the separate SEC cases against Bauer, Carrillo, Moynes and
Sharp. The article says,
“The SEC’s description of the investigation sounds quite a bit like an international spy story, where the paragraph
acknowledging all of those participating in the effort is over six inches long. The investigation was led by two of the SEC’s regional
offices, Boston and New York, and the SEC headquarters staff, along with personnel from the SEC’s Office of International
Affairs. The SEC organized the Office of International Affairs around the year 2000, as securities markets became ever more
globally interconnected (as was painfully evident in the Great Recession of 2007-9). These lawsuits are the first SEC enforcement
action I have ever seen where the filings include a color-coded world map identifying defendants by location. …
Moynes proceeded with the assistance of an interesting collection of serial securities law violators including a Mexican
attorney [Carrillo] at one time licensed to practice in California and New Jersey and still licensed in New York. This lawyer was
sued in 2013 by the SEC for “facilitating a pump and dump scheme involving penny stocks.” They sued him again in August 2021

5
https://www.scribd.com/document/429644254/191010-Frost-as-an-OPK-Short-Seller-Hypothesis
6
https://www.thestar.com/news/investigations/2021/10/05/canada-tax-havens-failure-to-charge.html
7
https://www.courtlistener.com/docket/60116237/united-states-v-sharp/
8
https://www.justice.gov/usao-ma/pr/four-individuals-charged-long-running-global-pump-and-dump-scheme
9
https://www.natlawreview.com/article/mony-mickle-maks-muckle-sec-charges-foreign-nationals-two-microcap-frauds
4
 “for his conduct associated with numerous microcap schemes.” Moynes also enlisted the services of Frederick L. Sharp and his
employees “to facilitate each step of his fraud.” Sharp and some of his employees were sued by the Commission in 2021. Sharp and
one employee were also criminally charged by the U.S. Department of Justice at that time. According to June 27, 2022, Complaint,
the SEC brought in the U.S. District Court for the District of Massachusetts, “[f]rom at least 2010 to 2019, the Sharp Group was in
the business of facilitating illegal stock sales in the public securities markets.” They helped Moyne conceal his identity as the seller
of “large blocks of each company’s stock to unsuspecting investors.” The Complaint lays out in detail the steps Moynes and his
associates used to “massage” the public’s interest in the stock of the two companies, and then conceal the structured operation of
selling them to the public at higher prices.”

In addition to Frederick Sharp’s association with Mossack Fonseca, the International P&D Fraud Network has other connections to the
Panama / Pandora Papers. The Panamanian regulatory authorities have been credited in press releases for assisting with several SEC cases. Both
Barry Honig and Michael Brauser appear in the Panama Papers searchable database. Martin Schlaff appears in the Pandora Papers.

Section 4: The P&D Network

Each of the hundreds of P&D frauds required a team manipulating the stock of a particular company. With hundreds of P&D operations,
there may have been thousands of people involved in the Network. Large P&D operations require a coordinated effort between a large number of
individuals for each separate P&D. Individuals, systems, mechanisms and elements in a P&D often include:

• Strategist / organizer • Boiler room • Attorney opinion

• Puppet corporate officer • Shell corporation • Press releases
• Puppet corporate director • Offshore entities • False SEC filings
• Stock promoter • Communication systems • Unregistered shares
• Investor relations • Banking systems • Lack of disclosure
• Attorney • Middlemen • Misleading disclosures
• Underwriter • “Experts’ with fake stories • Disregarding SEC rules
• Accountant • Special purpose entities • Decoy shareholders
• “Investor” • Securities broker • Undisclosed paid promotions
• Transfer agent • Advisor / consultant • Fake online identities
• Social media pumper • Convertible note • Undisclosed control groups
• Chat room pumper • Reverse merger • “Blocker” provisions
• Analyst • SEC registration statement • Private placements
• Investment bank • “Selling shareholders” in registration • Computer hackers
• Market maker statements • Toxic financing
5
 • Registered Direct Offering • Corporate name change • Offshore accounts
• Business “pivot” • Ticker symbol change

The P&D Securities Fraud Network has involved hundreds of companies. Some companies have been involved in more than just one P&D.
Many of the SEC and DOJ law enforcement cases are clustered around various themes:10
• Offshore trading and money laundering systems (e.g., Knox/Wintercap, Bajic, Sharp)
• Specific P&D frauds at specific companies (e.g., Honig, Vallos, YesDTC, Vaccarro, Leighton, Schoengood, Moynes)
• Violation of stock registration requirements (e.g., Morningview, Fife, Gomes, Schoengood, Carebourn)
• Violation of public disclosure requirements (e.g., Honig, Carrillo, Sharp)
• Illegal stock promotions (e.g., Galena, Irth, Honig, Gomes, Schoengood, Carrillo, Bauer, Moynes, Mikula)
• Sales of shares obtained by microcap “investors” (e.g., GEL Direct, Morningview, Keener, Almagardy, Fierro)

It is clear that the SEC and DOJ are far from finished with their law enforcement activities related to the P&D Network. For example, the
record in SEC v Honig indicates the existence of a criminal investigation. It is also clear that the SEC and DOJ now have many potential cooperating
witnesses available to testify in both ongoing litigation and also in new cases that the SEC and DOJ may initiate. Such witnesses may include
fraudsters who have pled guilty and / or consented to judgement such as Knox, Ford, Schoengood, Wise, Tobin and Targett-Adams.

The P&D Network has connections with a large international money laundering network that has been exposed by the Panama Papers and the
Pandora Papers. The Panama Papers originated from entities tied to a Panamanian law firm called Mossack Fonseca. One of the key players in the
P&D Network was also a key player in the money laundering network. A November 24, 2021 article with the headline “Accused in stock fraud, U.S.
officials want to know where's Fred Sharp?” appeared in the North Shore News (British Columbia).11 The DOJ has issued an arrest warrant for Sharp,
but he apparently remains at large. The British Columbia news article says,

“In 1997, Sharp relinquished his license to practice law and went on to incorporate the Vancouver office of Panama investment
firm Mossack Fonseca the following year. Although it dissolved in April 1999, Sharp carried on business under different corporate
entities elsewhere. …
In May 2016, Sharp became more widely known across the country as the Canadian face of the Panama Papers — a massive
leak of documents of Panamanian company Mossack Fonseca that revealed a vast network of offshore companies acting as tax havens
for elites. He helped register 1,167 offshore entities from his Vancouver office, according to the documents.”

The SEC complaint in SEC v Sharp alleges that Sharp’s involvement in hundreds of P&D frauds included, “providing networks of offshore
shell companies to conceal stock ownership.” This practice of creating numerous offshore entities is similar to Sharp’s role at Mossack Fonseca. In

10
Individual P&D frauds may fit in with multiple themes.
11
https://www.nsnews.com/bc-news/panana-papers-us-officials-searching-for-vancouvers-fred-sharp-4793223
6
the P&D Network and the Panama Papers Network, the money laundering and frauds are interwoven. Because of Sharp’s role in creating entities to
facilitate and hide frauds, Sharp is a central figure in the P&D Network. Paragraph 224 from SEC v Sharp mentions an August 9, 2021 case – SEC v
Carrillo (Boston SEC). The complaint in SEC v Sharp says,

“224. On August 4, 2021, the Commission filed a Complaint against Luis Carrillo in connection with his illegal sale of the
stock of Garmatex Holdings, Ltd. Carrillo, acting in concert with others, amassed approximately 88% of Garmatex’s unrestricted
shares that were available for trading, and they used the Sharp Group, Wintercap SA, Blacklight SA, and a separate broker to
execute the scheme.”

While the Sharp case mentions the Carillo case, the SEC has typically avoided disclosing information in complaints and press releases that
would point to the existence of the Fraud Network. However, the existence of the fraud network has become clear as the SEC and DOJ have
prosecuted more and more cases with fact patterns, people and entities that involve the international P&D securities fraud network.

Section 5: P&D Network Kingpins

There are a number of kingpins in the multi-billion-dollar P&D Fraud Network.12 These kingpins appear to include the following individuals.
(◦ indicates that civil charges have been filed by the SEC, * indicates that criminal charges have been filed by the DOJ, ⸋ denotes a billionaire)

• Phillip Frost◦⸋
• Barry Honig◦
• Frederick Sharp◦*
• Luis Carrillo◦*
• Ronald Bauer◦*
• Domenic Calibrigo◦*
• Martin Schlaff⸋

Martin Schlaff is the head of Liechtenstein hedge fund Alpha Capital Anstalt. Schlaff has also been linked to the Pandora Papers.13 The SEC
has been investigating an Alpha Capital Anstalt (“Alpha”) related entity (LH Financial) at least since 2015.14 It appears that the LH Financial
investigation gradually grew into the investigation of the entire P&D network.

12
These kingpins appear to operate like mob bosses in the mafia. It seems that they each control aspects of the Network, but they do not necessarily
conspire with or even know each other.
13
https://www.timesofisrael.com/former-justice-minister-billionaire-among-israelis-named-in-pandora-papers/
14
The DOJ investigation of LH Financial may also include a homicide investigation.
https://www.nydailynews.com/new-york/shady-thuggish-mogul-solomon-obstfeld-ran-powerful-pals-no-buying-suicide-story-article-1.180707
7
 Section 6: The Existence of the P&D Network is Gradually Revealed

The SEC and DOJ began a serious investigation of Honig and Frost in October of 2015 in conjunction with the SEC’s LH Financial
investigation.15 After growing increasingly frustrated with the lack of timely law of enforcement action by the SEC, whistleblowers Lee Pederson
(the writer of this report) and Daniel Fisher began providing information to Chris Carey (aka “Sharesleuth”) so that Carey would write about P&D
frauds conducted by Honig and Frost. The SEC initiated the “Galena cases” in 2017. On March 6, 2018, Carey wrote about the connection between
the Galena cases and the yet-to-be-filed SEC v Honig case:16

“Our investigation turned up a certain amount of overlap between those schemes [the Galena cases] and the touting network
covered in this report.
Some of the writers who were charged by the SEC last year wrote bullish articles about companies backed by Honig, Brauser
and Frost, including ChromaDex Corp. (Nasdaq: CDXC), Pershing Gold Corp. (Nasdaq: PGLC) and Senesco Technologies Inc.
(formerly OTC: SNTI). Those articles appeared in the period covered by the SEC actions.”

“[John] Ford posted a highly favorable – and highly misleading – story about BioZone that helped touch off a surge in trading
in September 2013. We found that Rae had posted a stealth promotion story about BioZone on a different site a few weeks earlier.
Brian Wilson of Bio-Wire also talked up the company in an interview that appeared on a third site in October 2013, while the trading
surge was still in full force.
All of Ford’s SeekingAlpha stories say he was not compensated for writing the pieces, and did not have a business relationship
with any of the companies mentioned. However, our investigation found that Ford did have a business relationship with Honig and his
group.
SEC filings show that Ford invested alongside Honig, [Michael] Brauser and Frost in at least five private placement deals that
provided capital to companies they backed.
Those deals were not open to ordinary investors. The only way Ford could have participated was through an invitation from
Honig or someone else overseeing the share sale. His access to those potentially lucrative deals could be viewed as a form of
compensation for his favorable articles.
SEC filings show that Ford was listed as a selling shareholder with Honig and other members of his group in the 2013
prospectuses for three companies — MGT Capital, Pershing Gold and Document Security Systems.
Ford posted bullish articles on all three companies at SeekingAlpha in late 2012 and 2013. Although he disclosed that he owned shares
of the companies, he did not say that he acquired some or all of them through his connections to Honig’s group.

15
It is worth noting that many of the Network P&D frauds did not occur until long after the SEC began its investigation of Alpha, Honig and Frost.
16
https://sharesleuth.com/pretenders-and-ghosts-stealth-promotion-network-exploits-financial-sites-to-tout-stocks/
8
 SEC filings show that Ford also participated in placements involving shares of BTX Trader Inc., which became WPCS, and
Eon Holdings Inc., which became Inventergy Global. In addition, he joined Honig, [John] Stetson, [Mark] Groussman and others in
a purchase of stock and convertible notes in VeriTeq Corp. (OTC: VTEQ) in late 2013.”

“The Securities and Exchange Commission has been investigating Honig and his associates in connection with two other
creations: MGT Capital Investments Inc. (OTC: MGTI) and BioZone Pharmaceuticals Inc., now Cocrystal Pharma Inc. (OTC:
COCP). Both had sudden, promotion-fueled surges in their share prices and trading volume, which enabled Honig and members of his
group to sell millions of dollars in stock.
A third company brought public by Honig’s group — Mabvax Therapeutics Holdings Inc. (Nasdaq: MBVX)
— disclosed Jan. 30 that the SEC was conducting an investigation related to its registration statements.
On that same day, it told the SEC it wanted to withdraw two registration statements (here and here) filed in October 2017. They
covered the resale of millions of shares issuable to Honig, Brauser, Frost, Opko and others, through the conversion of preferred stock.
Mabvax was one of the stocks the stealth promotion network touted in 2016.”

The SEC initiated SEC v Honig on September 7, 2018, six months after the Carey article was published. The SEC’s complaint described
three P&D’s frauds that Carey had described in the March 6 article: BioZone, MGT Capital and MabVax. Seven individuals and entities mentioned
in Carey’s article (Honig, Frost, Opko, Brauser, Ford, Stetson and Groussman) and were named as defendants in SEC v Honig. Alpha Capital Anstalt
(but not Martin Schlaff) was also named as a defendant.

The SEC continued to file interconnected Fraud Network cases without openly acknowledging the connections between the cases. However,
the connections and the existence of ongoing SEC and DOJ investigations were becoming clear to interested observers. On December 9, 2020, Carey
published an article outlining some of the connections.17 The second Carey article mentioned the following law enforcement actions that are
connected to the Network: Irth, Knox, Isen, Sidoti, Tobin, Ciccarelli and YesDTC. Carey made his connections mostly based on stock promoters
and writers who each promoted numerous P&D companies.

As the SEC and DOJ continued to file new cases, the connections between the cases became clearer. The Luis Carillo civil case mentions the
Blacklight case. The complaint in Carrillo says, “Carrillo defrauded investors by concealing the fact that he, in concert with others, controlled the
securities of numerous publicly traded companies—including the securities of Aureus, Inc. (“Aureus”), Garmatex Holdings, Ltd. (“Garmatex”), and
OneLife Technologies Corp. (“OneLife”).” The Carrillo case does not mention the Sharp case, though Garmatex is mentioned in both cases.

Carrillo is a repeat securities fraud offender, with a 2013 SEC case preceding his 2021 case. The complaint in the 2021 case says,
“15. Luis Jimenez Carrillo (“Carrillo”), age 47, is a citizen and resident of Mexico. He was formerly a U.S. citizen and was
formerly licensed to practice law in California and New Jersey. Carrillo remains licensed to practice law in New York. Carrillo was
charged by the Commission in 2013 for his role as a securities attorney in facilitating a pump and dump scheme involving penny
17
https://sharesleuth.com/pretenders-and-ghosts-revisited-network-of-stealth-promotion-writers-linked-to-additional-pump-and-dump-schemes/
9
 stocks. A judgment in that case was entered against Carrillo after his default. See SEC v. Carrillo Huettel LLP, et al., Civil Action No.
13-cv-1735 (S.D.N.Y.).” See SEC v Carrillo Huettel (2013).18
Luis Carrillo also appears to be linked to the 2014 case of SEC v Bandfield.19 In 2014 an anonymous author published an online story with
the headline, “$500 MILLION BELIZE PENNY STOCK MANIPULATION RING SHUT DOWN.”20 This article says,
“Robert Bandfield and Andrew Godfrey are very familiar names to us. Their scheme was no secret to us either. In old
research I posted on the IHUB going back to early 2012, I identified Robert Bandfield and Andrew Godfrey for their roles in helping
set up anonymous Belize business entities for various pump in dump schemes including SNPK, ROSV, and NTRO. using their
company ICP Corporate Services LLC. I also pointed out how they were also involved in setting up anonymous entities
for TGRO and NHUR which would both become future stock promotions. TGRO by Stock Tips and NHUR by the Billionaire Stocks
group (both of which have their roots with the old Hack the Stock Market crew). …
In that old research from 2012, I made it very clear that SNPK, ROSV, and NTRO were all linked sharing some of the same
insiders including: Robert Shull (and the Shull family), Douglas Roe, Harry Lappa, Luis Carrillo, and Wade Huettel. …
Luis Carrillo and Wade Huettel also played big roles in two other major pump & dump scams that showed up in SEC
litigation, TSHO and PBEC. TSHO and PBEC were both entities controlled by John Kirk and Benjamin Kirk. The Kirks used
offshore entities to hide their share ownership similar to the Belize scheme outlined in today's SEC and DOJ reports only back then it
was Gibraltar Global Securities out of the Bahamas run by Warren Davis that was used for the money laundering scheme. Gibraltar
was shutdown in 2012 after being used for years to launder hundreds of millions of dollars through penny stock manipulation
schemes …”

Once the existence of the Network was fully apparent to me, it became possible to understand the relationships of previously filed cases
regarding their undisclosed connections within the Network. The SEC and DOJ have continued to file new cases involving the Network.

Section 7: The 2017-2018 P&D at PolarityTE (PTE)

The evidence that Frost and Honig conducted a P&D at PTE is overwhelming. However, it appears that the SEC and DOJ are not in any
hurry to file charges. The SEC has a 10-year statute of limitations for civil securities fraud to work with. The DOJ has a six-year SOL for criminal
securities fraud to work with. I have published numerous items about the PolarityTE P&D, including the following:

18
https://www.sec.gov/litigation/complaints/2013/comp-pr2013-39.pdf
19
https://www.sec.gov/litigation/complaints/2014/comp-pr2014-189.pdf
20
https://promotionstocksecrets.com/500-million-belize-penny-stock-manipulation-ring-shut/
10
 • June 7, 2019: Letter to PTE Director Minnie Baylor-Henry21
• July 10, 2019: Letter to PTE Director Minnie Baylor-Henry22
• October 26, 2019: Last days of the Frost gang23
• November 3, 2019: Frost gang Report24
• November 6, 2019: Open Letter to SEC Chair Jay Clayton25
• December 8, 2019: 23rd Letter to PTE Director Minnie Baylor-Henry 26
• January 6, 2020: Phillip Frost’s Legal Quagmire27
• February 6, 2020: Draft Appendix to Frost gang Report28
• February 12, 2020: 24th Letter to PTE Director Minnie Baylor-Henry29
• May 2, 2020: Open Letter to Law Enforcement Agents30 (“WTF Letter”)
• June 14, 2020: Frost gang Report Version 10.431 (85 pages)
• October 29, 2020: PolarityTE Update32
• December 6, 2020: Letter to PTE Director Minnie Baylor-Henry33
• December 30, 2020: PolarityTE Update to Minnie Baylor-Henry34
• May 14, 2021: Open Letter Regarding the Frost-Honig Securities Fraud Network35
• August 21, 2021: Open Letter to SEC Chair Gary Gensler.36

21
https://www.scribd.com/document/412657460/190607-Letter-to-PTE-Board-Member-Minnie-Baylor-Henry
22
https://www.scribd.com/document/416499299/July-10-2019-Email-to-Minnie-Baylor-Henry
23
https://www.scribd.com/document/432154240/191026-Last-Days-of-the-Frost-Gang
24
https://www.scribd.com/document/433227623/191103-Frost-Gang-Report
25
https://www.scribd.com/document/433709218/191106-Open-Letter-to-Jay-Clayton
26
https://www.scribd.com/document/438898898/191208-23rd-Letter-to-Minnie-Baylor-Henry
27
https://www.scribd.com/document/441899691/200106-Phillip-Frost-s-Legal-Quagmire
28
https://www.scribd.com/document/445908638/Draft-Appendix-to-Frost-Gang-Report
29
https://www.scribd.com/document/446767765/200212-24th-Letter-to-Minnie-Baylor-Henry
30
https://www.scribd.com/document/459521279/200502-Open-Letter-to-LEAs
31
https://www.scribd.com/document/465652133/Frost-Gang-Report-Version-10-4-June-14-2020
32
https://www.scribd.com/document/482073168/201029-PolarityTE-Update
33
https://www.scribd.com/document/487156376/201206-Baylor-Henry-Letter-Final
34
https://www.scribd.com/document/489468783/201230-Baylor-Henry-Letter
35
https://www.scribd.com/document/507891342/210514-Open-Letter-Regarding-Securities-Fraud-Networks
36
https://www.scribd.com/document/521124753/Open-Letter-to-SEC-Chairman-Gary-Gensler
11
 Section 8: Law Enforcement Actions Involving the P&D Network

Each of the P&D cases listed in the following table is connected to at least one of the other cases by having one or more individuals and/or
components.in common with each other. Some of these connections are inferred by geography and/or by law enforcement activity. Some of the
connections are indicative of ongoing investigations. The connections between the cases in the P&D Network include:
• There are common individuals and entities between many of the cases.
• There is an inter-woven stock promotion network that has been used in the frauds.
• The frauds have involved many overlapping foreign jurisdictions.
• There has been obvious coordination between various SEC offices for investigating and prosecuting the cases.
• Certain recent SEC enforcement actions involve partial consents to judgment, where the final amounts of financial judgments seem to be
dependent on testimony of defendants in related cases.
• Certain plea deals in related criminal cases involve deferred sentencing, apparently also dependent upon testimony yet to come.
• Many of the complaints refer to individuals and entities anonymously (e.g., “Investor A”) where such individuals and entities may be the
subject of ongoing investigations or have agreed to provide testimony.
• Many of the complaints fail to mention obvious components of the P&D fraud described in the complaint, suggesting the SEC’s intention to
disguise connections between the cases. (e.g., There is no mention of any stock promotions for “400 issuers” in the extremely short 12-page
complaint in SEC v GEL Direct.)
• Several cases with parallel civil and criminal charges have had the SEC case stayed while the criminal case proceeds. These cases include
Ciapala, Bauer and Calabrigo.
• Both the SEC and DOJ cases against Frederick Sharp have been sealed.
• Many of the cases have involved numerous issuers, as shown in the table below.

Cases Apparently Related to the P&D Fraud Network - listed chronologically

Case name SEC DOJ Partial consents to judgment (SEC) / Number of Number of $$$
Civil Crim. Deferred sentencing (DOJ) / defendants Issuers
Notes and links named involved

US v Discala x Sentenced to 11 years and six months in prison.

July 15, 2014
SEC v x
Archer

12
May 11,
2016
YesDTC x x Greg Jaclin, Joseph Noel, Imran Husain (Barry Honig was involved, but 3
May 12, not charged.)
2016
Galena cases x https://www.sec.gov/news/press-release/2017-79 27
April 10, (13 SEC
2017 “27 Firms and Individuals Charged With Fraudulent Promotion of cases)
Stocks”
SEC v x Sale of convertible notes, 7.4 B shares 39 $1.4 M
Almagardy Microcap Equity Corp. Cybergy
Nov 20,
2017
SEC v Honig x SEC partial judgments: Maza, Keller, Honig 20 3 27 M
Sept 7, 2018
“SEC Charges Microcap Fraudsters for Roles in Lucrative Market
Manipulation Schemes”
Knox/ x x DOJ: “The defendant [Knox] is rescheduled for sentencing to February 2 50 164 M
Wintercap/ 16, 2023 at 3:00 PM.” individuals
Silverton SA
Oct 3, 2018 https://www.sec.gov/litigation/litreleases/2018/lr24304.htm

“SEC Halts Microcap Fraud Scheme Orchestrated Through International

Accounts”

SEC press release on final judgments issued Dec 21, 2022.

Tobin x x DOJ: Sentenced to “one year and one day in prison” 4 2

Nov 28,
2018 https://www.sec.gov/litigation/litreleases/2018/lr24361.htm

“SEC Charges Four in Fraudulent Microcap Manipulation Scheme

Orchestrated Through International Accounts”
Landis x x Connected to Tobin, Wintercap and DiChiara. 97 $2.5 M
Nov 28, Environmental Packaging Technologies, CURE Pharma.
2018

13
 “Landis was sentenced on January 24, 2020, in a parallel criminal action
to six months in prison and two years of supervised release, and ordered
to pay a $50,000 fine. The court later ordered Landis to pay forfeiture of
$2,505,488. Landis had pleaded guilty in January 2019 to one count of
securities fraud and one count of aiding and abetting securities fraud.”

US v x x DOJ: “The defendant [Targett-Adams] is scheduled to be sentenced on

Targett- June 15, 2023 at 2:30 PM.”
Adams
February 6,
2019
SEC v x
Sugarman
June 26,
2019
US v x Case “terminated” 4-5 100 M
Vaccaro
July 19, 2019 Then, “Case Open Date: November 9, 2022”
https://www.justice.gov/atr/case/united-states-v-vaccaro-et-al-and-
united-states-v-eli-taieb
US v Isen x Case “terminated”
Sept 23,
2019
US v x Sentenced to 3 months prison plus probation.
Auerbach
Oct 2, 2019
Blacklight / x x https://www.sec.gov/news/press-release/2020-1 6 45 35 M
Ciapala / individuals
Bajic cases “SEC Charges Six Individuals in International Microcap Fraud Schemes”
Jan 2, 2020 (2 SEC
SEC v Ciapala has been stayed on motion of the DOJ. cases)

SEC v Fierro x JDF Capital

Feb 26, 2020

14
SEC v x JMJ Financial 100 issuers $21.5 M
Keener
Mar 24, 2020 Plaintiff’s statement of material facts (Blink):
https://ia601702.us.archive.org/31/items/gov.uscourts.flsd.568895/gov.us
courts.flsd.568895.67.0.pdf

SEC v x https://www.sec.gov/litigation/litreleases/2020/lr24791.htm 12 1 $1.5

Leighton million
April 8, 2020 “SEC Charges Seven in Microcap Fraud Scheme” MassRoots settlement

SEC v x https://www.sec.gov/litigation/litreleases/2020/lr24839.htm 11 More than $25 million

Gomes 20
June 9, 2020 “SEC Obtains Judgments Against Defendants in a Microcap Fraud
Scheme”
Schmidt x x 25 M
June 11,
2020
Irth x 9
July 22, 2020
SEC v Fife x https://www.sec.gov/litigation/litreleases/2020/lr24886.htm 1 135 61 M
Sept 3, 2020 individual
“The SEC alleges that Fife and his companies engaged in more than 250
convertible transactions with approximately 135 issuers, sold more than
21 billion newly-issued penny stock shares into the market, and obtained
more than $61 million in profits.”

Case is in discovery.

SEC v x 1 1 $57,167
DiChiara
Sept 3, 2020

SEC v x https://www.sec.gov/litigation/litreleases/2020/lr24940.htm
Ciccarelli

15
Sept 30, “Commission Charges South Carolina Resident in Pump-And-Dump
2020 Scheme”
SEC v Sidoti x
Oct 19, 2020
SEC v x x “Defendant is still awaiting a sentencing date.” (from civil case docket – Tyrell
Schoengood as of October 26, 2022) settled for
Feb 23, 2021 ~250K
Laidlaw https://www.finra.org/sites/default/files/fda_documents/2016049087201 1.5 M fine
July 15, 2021 %20Laidlaw%20%26%20Company%20%28UK%29%20Ltd%20CRD% - FINRA
20119037%20John%20Coolong%20CRD%205924271%20AWC%20va.
pdf

FINRA action

SEC v Govil x Promoted by Irth (see “Pretenders and Ghosts” article) Cemtrex
July 19, 2021
Carrillo x x Both civil (SEC) and criminal (DOJ) charges. 4 ‘numerous’ $75 million
Aug 4, 2021 including
https://www.sec.gov/litigation/litreleases/2021/lr25161.htm Garmatex

Sharp x x https://www.sec.gov/litigation/litreleases/2021/lr25164.htm 9 “hundreds” “over a

Aug 5-12, individuals billion”
2021 “SEC Charges International Microcap Fraud Scheme Participants”
Avtar
Both SEC and DOJ cases have been sealed since August 6, 2021. Dhillon

SEC v GPL x 8 140 81 M in

Ventures proceeds
Aug 13,
2021
In the Matter x https://www.sec.gov/litigation/admin/2021/33-10975.pdf 500 K civil
of Parateum penalty
Sept 2, 2021 Administrative action

16
 “Respondent undertakes to: a. Cooperate fully with the Commission in
any and all investigations, litigations or other proceedings relating to or
arising from the matters described in this Order;”

SEC v x
Carnovale
Dec 2, 2021
In the Matter 1
of US Data
Mining
(State of
Mass.)
March 22,
2022
SEC v Shah x
April 12,
2022
SEC v Bauer x x https://www.justice.gov/usao-sdny/pr/ten-members-international-stock- 10 17 145 M
April 14, manipulation-ring-charged-manhattan-federal-court
2022
“SEC Charges Eight Participants in Cross-Border Penny Stock Fraud
Scheme”

SEC case has been stayed on motion of the DOJ.

SEC v x x https://www.sec.gov/news/press-release/2022-62 16 194 M

Calabrigo (3 SEC
April 14, “SEC Uncovers $194 Million Penny Stock Schemes that Spanned Three cases)
2022 Continents”

SEC case has been stayed on motion of the DOJ.

SEC v x 2 2 10 M
Stubos Note: This case involves Morrie Tobin and the Sharp Group.
June 8, 2022

17
SEC v x 2 2 1.5 M
Moynes
June 27,
2022
SEC v x 3 150 9M
Crown (35 billion settlement
Bridge shares)
Partners
Aug 2, 2022
SEC v x 18 2 1.3 M
Mohamed
Aug 15,
2022
SEC v x https://www.sec.gov/litigation/litreleases/2022/lr25520.htm#:~:text=filed 2 35 14.8 M
Morningview %20Sept.,securities%20dealers%20with%20the%20SEC. (3.2 billion
Financial shares)
Sept 23, “SEC Charges Convertible Note Firm and Its Managing Member with
2022 Acting as Unregistered Securities Dealers”
SEC v Vallos x x “14. In or around April 2017, Vallos created, and caused to be created, 1 1
Sept 23, documentation which transferred and assigned $1,500 of Company A’s
2022 promissory note to an individual (referred to hereafter as “Individual 1”).
In other words, Gold Lakes’s obligation to pay $1,500 of its outstanding
debt to Company A was transferred from Company A to Individual 1;
Gold Lakes then owed Individual 1 $1,500. The transfer agreement also
contained a right for Individual 1 to convert the $1,500 debt obligation to
150,000,000 shares of Gold Lakes stock.”

SEC v x 2 40 13.9 M
Carebourn (17.5
Capital billion
September shares)
27, 2022
SEC v x https://www.sec.gov/litigation/litreleases/2022/lr25541.htm 8 4
Mikula individuals
September “SEC Charges Eight in Scheme to Fraudulently Promote Securities
30, 2022 Offerings”

18
 Avtar
Dhillon
SEC v x https://www.sec.gov/litigation/litreleases/2022/lr25546.htm 4 1
Stephens
September “The SEC appreciates the assistance of the U.S. Attorney's Office for the
30, 2022 Southern District of California, the Federal Bureau of Investigation, the
Financial Industry Regulatory Authority, the Alberta Securities
Commission, the British Columbia Securities Commission, the Hong
Kong Securities and Futures Commission, the Malta Financial Services
Authority, the Monetary Authority of Singapore, the Quebec Autorité des
Marchés Financier, and the Royal Canadian Mounted Police.”

In the Matter x Administrative enforcement action by SEC 1 1 $2.5

of Cemtrex million
Sept 30, https://www.sec.gov/litigation/admin/2022/33-11114.pdf
2022
SEC v Willis x See:
Oct 18, 2022 https://www.sec.gov/Archives/edgar/data/1579823/00010799741400017
4/amerbrewings1a23252014.htm

SEC v GEL x https://www.sec.gov/litigation/litreleases/2022/lr25579.htm 4 400 $1.2 billion

Direct Trust
November
17, 2022
SEC v Earle x Belize (F.A. Ventures) and British Columbia (Barry Reagh) 5 2
Dec 5, 2022
SEC v J.H. x “75. J.H. Darbie knew from due diligence it conducted in accepting a 160 $105 M in
Darbie deposit of shares of Issuer D that the company was mentioned in proceeds
Dec 13, 2022 reporting concerning the “Panama Papers” …”

Section 9: Examples of Individuals and Entities who are Connected to

P&D Frauds at Multiple Companies / Multiple SEC Cases

19
Note: There are many dozens of these types of examples.

-1- Example of Avtar Dhillon:

Defendant in SEC v Sharp
Defendant in SEC v Mikula
COB (Chairman of Board) at Emerald Health
Connected to Arch, OncoSec, Wintercap

-2- Example of John Ford

Defendant in SEC v Honig
Promoted BZNE
“Selling shareholder” at MGTI and DSS

-3- Example of Irth Communications

Promoted MabVax and other issuers
Fined by SEC

-4- Example of Leichtenstein Financial Market Authority

The Liechtenstein Financial Market Authority is mentioned in several of the P&D Network SEC cases including: SEC v Knox, SEC v Bauer, SEC v
Carillo, SEC v Calabrigo, SEC v Sugarman, SEC v Stubos, SEC v Sharp and SEC v Moynes. Since Liechtenstein is the home of Alpha Capital
Anstalt, (defendant in SEC v Honig), this may be more than a coincidence.

-5- Example of Aaron Dale Wise - timeline

date Item/event
Jan 15, 2011 Wise writes for Benzinga37
Feb 1, 2011 Wise writes for The StreetSweeper:
Facebook post
Nov 1, 2013 Document Securities Systems (DSS) prospectus38
(Wise was listed as a selling shareholder along with Alan Honig, Alpha Capital Anstalt (Liechtenstein), Barry Honig, Empery
Asset Master, FGIT, GRQ Consultants, Hudson Bay, Iroquois, John Ford, John O’Rourke, Jill Strauss, Jonathon Honig,
Michael Brauser, Sandor Capital (John Lemak), Stetson Capital and many others.)

37
https://www.benzinga.com/trading-ideas/technicals/11/01/782552/profitable-backtested-trading-system-im-bored
38
https://www.sec.gov/Archives/edgar/data/771999/000114420413060013/v359773_424b3.htm
20
 “between “iii. McKnight hired Wise to create an online presence for McKnight’s entity to make it appear legitimate, and Wise built a
December generic website for the company at McKnight’s direction; iv. McKnight coordinated the transfer of $3,682,480 of the money he
2016 and June received from Bajic and/or Taneja to an entity controlled by Wise, keeping $367,520 for himself; v. Wise, at McKnight’s
2017” direction, then transferred $3,373,500 to a company that hired other stock promoters (the “Stock Promotion Arranger”). The
Stock Promoter Arranger hired others to tout four of the publicly traded companies whose stock the Platform Defendants
planned to (and did) sell. For performing this service, Wise kept $308,980 for himself;” (paragraph 59 of complaint in SEC v
Bajic)
Jan 4, 2017 “ii. On or about January 4, 2017, McKnight coordinated the transfer of $250,000 to a bank account controlled by Wise. Also on
or about January 4, 2017, McKnight told Wise, in sum and substance, that the $250,000 was for a stock promotional campaign
directed at Blake stock. McKnight also directed Wise to send virtually all of the money to the Stock Promotion Arranger. iv.
Wise did as directed and kept a cut of the $250,000 for himself. Specifically, on or about January 4, 2017, Wise transferred
approximately $242,500 to the Stock Promotion Arranger, but did not talk with the Stock Promotion Arranger about Blake.’
(paragraph 60 of complaint in SEC v Bajic)

Nov 2, 2018 Record of Form 320 from Nov 2, 2018 FBI interview with Wise
(Item 67 at ECF 185-1 in SEC v Honig – SEC privilege log)
Jan 2, 2020 Complaint in SEC v Bajic39
“Aaron Dale Wise … assisted them in concealing the source of the money used to pay for the promotions.” (paragraph 8)
Nov 23, 2020 Final Judgment against Wise in SEC v Bajic40

-6- Example of individual and entity “investors” who repeatedly invest in companies involved in proven and/or suspected P&D frauds: Alpha
Capital Anstalt, John Lemak, Barry Honig, Phillip Frost, Michael Brauser, Iroquois Capital, Hudson Bay Capital, Sandor Capital, Intracoastal
Capital, Empery Asset Management, John Stetson and Melachdavid.

-7- Example of Barry Honig

Defendant in SEC V Honig (partial consent to judgment)
Defendant in MabVax v Honig (ongoing California private civil case)
Plaintiff in Honig v Buhl
The “LeBron James of pump-and-dumps” as per Nate Anderson
Provided secret funding at Laidlaw41

39
https://www.sec.gov/litigation/complaints/2020/comp24712-2.pdf
40
https://storage.courtlistener.com/recap/gov.uscourts.nysd.529334/gov.uscourts.nysd.529334.219.0.pd
41
https://www.teribuhl.com/2019/09/25/barry-honig-secretly-funded-underwriting-in-his-laidlaw-co-deals-trpx/
21