Springfield Man Admits Running $1.1M Stock Scheme: US Attorney

SPRINGFIELD, NJ — A Springfield man and owner of a purported business consulting firm admitted on Tuesday to operating a $1.1 million scheme that artificially inflated the stock price of a publicly traded company he controlled, U.S. Attorney Craig Carpenito announced.

James Farinella, 52, pleaded guilty before U.S. District Judge Anne E. Thompson in Trenton federal court to one count of conspiracy to commit securities fraud.

From June through December 2012, Farinella and others allegedly operated a scheme to profit by fraudulently inflating the prices of Pazoo Inc. (PZOO), which had little or no real business operations when it was started in 2012, according to the documents filed in this case and statements made in court:

Farinella reportedly controlled 98 percent of the free-trading shares in Pazoo.

To inflate prices of the stock, Farinella and others allegedly made a series of trades between accounts they controlled to create the appearance that Pazoo stock was rising in price and heavily traded. Additionally, misleading promotional materials were sent out to lure investors to purchase the stocks, including touting Pazoo as a leading provider of nutritional supplements for people and their pets, according to the release.

Afterwards, Farinella and his conspirators allegedly sold large volumes of the stock to investors at the artificially inflated prices. The company’s stock price then dropped, causing victims of the scheme to suffer losses. The alleged stock manipulation scheme generated about $1.1 million in gross trading proceeds according to the report.

Farinella faces a maximum potential penalty of five years in prison and a $250,000 fine or twice the gross gain or loss from the offense for the conspiracy to commit securities fraud count.

Sentencing is scheduled for Feb. 5, 2019.

(Image via Shutterstock)

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