Wayne Fraudster Admits To More Securities Fraud: Feds

WAYNE, PA – A Wayne man who was previously convicted of two separate securities fraud-related crimes pleaded guilty Wednesday to another securities fraud-related charge, according to federal authorities.

U.S. Attorney William M. McSwain said Wednesday Howard M. Appel, 57, of Wayne, pleaded guilty to one count of conspiracy to commit securities fraud.

Appel faces a maximum sentence of five years' imprisonment, three years of supervised release, a fine of $250,000 or twice the gross gain or loss, whichever is greatest, and a $100 special assessment, according to officials.

Following his plea of guilty, Appel was ordered detained by U.S. District Judge Paul S. Diamond, officials said.

"This habitual fraudster manipulated the markets to further his own self-interest," said McSwain. "Today, thanks to the hard work and diligence of the FBI, the Securities and Exchange Commission’s New York Office, and our Office, the defendant’s crimes landed him in jail, which is where he belongs."

Appel admitted that after his release from prison following two prior securities-fraud related convictions, he participated in a new securities fraud scheme involving publicly traded companies, including Virtual Piggy, Inc. (ticker symbol "VPIG"), and Red Mountain Resources, Inc. (ticker symbol "RDMP"), according to federal authorities.

He acquired title to the shares in the names of nominees to hide his ownership block from investors and made between $3 million and $4 million from his scheme by artificially inflating the share price by, among other things, engaging in coordinated buying, and selling with co-conspirators, according to officials.

Appel also admitted that he traded on inside information that he obtained as a result of his "consulting" work for the companies, including the status of the companies' efforts to get listed on NASDAQ, authorities said.

Sentencing is scheduled for Nov. 26. Appel faces a maximum sentence of 5 years’ incarceration, a three-year period of supervised release, a fine of $250,000 or twice the gross gain or loss, whichever is greatest, and a $100 special assessment.

The case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Michael S. Lowe. The parallel civil enforcement proceeding was filed by the Securities and Exchange Commission’s New York Regional Office, under the direction of Mark P. Berger.

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