Alpharetta Man Gets 10 Years In Investment Fraud Scheme

ALPHARETTA, GA — Two metro Atlanta men will serve time in federal prison on charges they manipulated the market for a publicly-traded company, and carried out a second investment fraud scheme using a new business corporation they organized as the "bait" for investors, the U.S. Attorney's Office for the Northern District of Georgia said.

Marc E. Bercoon, 58, of Dunwoody and William A. Goldstein, 54, of Alpharetta were each sentenced to 10 years in prison, three years of probation upon their release, and will have to pay $1.49 million in restitution. The court also entered a forfeiture order for both defendants in the amount of $1.9 million. Both men were convicted by a jury in February on 12 counts of conspiracy, mail fraud, wire fraud and securities fraud.

“These defendants manipulated the stock of a publicly traded company by orchestrating two schemes, netting over $2.5 million from investors,” U.S. Attorney BJay Pak said Tuesday. “At the same time they were rigging the stock market, the defendants fleeced dozens of investors in a separate fraud scheme. Today’s sentencing marks a fitting end to the defendants’ long history of cheating investors out of their hard-earned money.”

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According to federal prosecutors, from July 2009 to September 2011, Bercoon and Goldstein conspired with a third defendant, Peter P. Veugeler, and others to manipulate the market for shares of MedCareers Group, Inc., a company quoted on the over-the-counter bulletin board under the ticker symbol MCGI.

The conspiracy culminated in two so-called "pump and dump" moves carried out in March and May 2010 where Bercoon and Goldstein arranged for the company to issue misleading press releases and Security and Exchange Commission filings while co-conspirators distributed emails touting MedCareer's stock. While the price of MCGI and the demand for the stock were both artificially high following these efforts, the defendants orchestrated a sell-off of their stock, coordinating activity with accounts in the names of other people and entities to hide their involvement.

Between May 2009 and June 2010, Goldstein and Bercoon also carried out another investment fraud involving a privately held company. The pair created Find.com Acquisition, Inc. and solicited investments from dozens of individuals. They told investors, and induced brokers working for them to tell investors, that their funds would be used to develop a new internet search engine named Find.com.

The two defendants used the bulk of more than $1.5 million raised from investors for unrelated purposes, such as subsidizing other business ventures and making payments to themselves and their family members. In fact, more than $550,000 of the $1.5 million invested in Find.com Acquisition, Inc. was simply withdrawn from the bank in cash shortly after being invested, according to prosecutors.

As part of the scheme, investors were provided with written offering materials. Along with claiming that investments would be used to improve the Find.com search engine business, the written materials also said that investors were being offered the opportunity to buy stock at a price of $1/share, and that no more than 12.5 percent of investments would go toward commissions.

Despite these representations in the written offering materials, Bercoon and Goldstein sold stock to some investors at heavily discounted prices without informing other investors and paid commissions of 30 to 40 percent to brokers on some investments. The charges stem from an investigation conducted by the FBI in which court-authorized wiretaps were used to intercept telephone conversations.

In 2010, the SEC sued Bercoon and Goldstein in connection with a separate investment fraud scheme concerning LADP Acquisition, Inc. A judgment of over $3 million was entered against both men in that case. The Court applied a sentencing enhancement for violation of a prior judicial order, finding that the defendants violated a preliminary injunction in the LADP case.

This case was investigated by the Federal Bureau of Investigation. Assistant U.S. Attorney Stephen H. McClain, Chief of the Complex Frauds Section, and Assistant U.S. Attorneys Alana R. Black and Kamal Ghali prosecuted the case.

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