Former CEO Convicted in Stock Market Scheme

COOK COUNTY, IL — The former Chief Executive Officer of a northwest suburban nutrition company pleaded guilty last week to securities fraud for engaging in a market manipulation scheme to artificially inflate the company’s stock price. Andrew J. Kandalepas 67, of Schaumburg, entered the guilty plea in federal court June 11, admitting to one count of securities fraud. U.S. District Judge Gary Feinerman set sentencing for Sept. 5, 2019, according to a news release from the Federal Bureau of Investigation.

Kandalepas was the CEO, president and chairman of the Board for Hoffman Estates-based Wellness Center USA Inc. The company raised more than $19 million from investors through the sale of common stock, and Kandalepas held more than three million shares, authorities said.

Between December 2012 and June 2015, Kandalepas told authorities he bought and sold Wellness Center shares for the purpose of artificially inflating the stock price, according to the news release.

Many of his trades occurred at or near the close of normal trading hours in a form of market manipulation known as "marking the close," authorities said. According to an example cited in the plea agreement, Kandalepas, using a brokerage account in the name of an acquaintance, executed a trade to buy 300 Wellness Center shares within the last five seconds of the trading day on May 4, 2015.

The trade artificially raised Wellness Center’s share price by 4 percent, from 27 to 28 cents, which brought in $30,000 in profits for Kandalepas.

Authorities say Kandalepas netted at least $136,176 in trading profits for his personal use.