IRS - Internal Revenue Service
04/30/2024 | Press release | Distributed by Public on 05/01/2024 05:47
Ventura County man and L.A. County man charged in alleged multimillion-dollar 'pump-and-dump' securities fraud scheme
Date: April 30, 2024
Contact:[email protected]
An indictment was unsealed today charging two California men for allegedly conspiring to defraud investors in a multi-year scheme involving the acquisition and sale of Airborne Wireless Network (stock ticker: ABWN) securities.
Kalistratos "Kelly" Kabilafkas, of Moorpark, and Jack Edward Daniels, of Agoura Hills, are charged with one count of conspiracy and one count of securities fraud.
Kabilafkas' arraignment is scheduled for this afternoon in United States District Court in downtown Los Angeles. Daniels' arraignment is scheduled for May 3 in U.S. District Court in downtown Los Angeles.
According to the indictment, Kabilafkas and Daniels conspired to secretly acquire the freely tradeable shares of a publicly traded shell company that they subsequently rebranded as Airborne. To acquire the company, Kabilafkas allegedly misappropriated a $474,500 sham charitable donation and used the funds to secretly buy the shell company's stock. Following the acquisition, together with Kabilafkas, Daniels-Airborne's president and sole director - allegedly filed false reports with the Securities and Exchange Commission to conceal from investors that Kabilafkas secretly held all of Airborne's stock.
Without disclosing Kabilafkas's acquisition of Airborne's shares, Kabilafkas and Daniels allegedly used investors' funds to orchestrate a multimillion-dollar advertising campaign designed to inflate Airborne's stock price. During the advertising campaign, Airborne's share price increased significantly for short periods of time, and Kabilafkas allegedly capitalized on the stock price spikes to sell millions of shares of Airborne stock and reap millions of dollars in ill-gotten gains.
An indictment is merely an allegation, and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
If convicted, Kabilafkas and Daniels each face a maximum penalty of five years in prison for conspiracy and 20 years in prison for securities fraud.
IRS Criminal Investigation, the United States Postal Inspection Service, and the FBI are investigating this matter.
Assistant United States Attorney James C. Hughes of the Major Frauds Section and Trial Attorneys Theodore M. Kneller and Matt Kahn of the Justice Department's Criminal Division's Fraud Section are prosecuting this case.
If you believe you are a victim in this case, please contact the Fraud Section's Victim Witness Unit toll-free at 888-549-3945 or by email.