Vida Life CEO Sentenced to 30 months in securities fraud scheme

CHIEF EXECUTIVE OFFICER SENTENCED TO

30 MONTHS IN SECURITIES FRAUD SCHEME

 

        BOSTON - The chief executive of Vida Life International Ltd., a public company that traded on the over-the-counter securities market, was sentenced yesterday to 30 months in federal prison for conspiracy to commit securities fraud, wire fraud and mail fraud.

 

        John C. Jordan, 62, of Cameron Park, Calif., was sentenced by United States District Court Judge Nathaniel M. Gorton after being convicted in May by a jury.  Jordan was also ordered to pay a fine and to forfeit his illegal earnings.

 

        Jordan was sentenced for his role in a scheme to pay secret kickbacks to an investment fund representative who had agreed to steer the investment fund to buy stock in Vida Life.  The kickbacks were concealed through the use of a sham consulting agreement and other fraudulent documents.  Jordan did not know that the purported investment fund representative was actually an undercover agent with the Federal Bureau of Investigation. 

 

        The conviction and sentence followed a year-long investigation focusing on preventing fraud in the micro-cap stock markets.  Microcap companies are small publicly traded companies whose stock often trades at pennies a share.  Fraud in the microcap markets is of increasing concern to regulators as such markets have proven to be fertile grounds for fraud and abuse.  This is, in part, because accurate information about microcap stocks may be difficult for the average investor to find, since many microcap companies do not file financial reports with the Securities Exchange Commission.

 

Two additional defendants who were charged as part of the undercover operation were sentenced last month.  Steven Berman, 50, of Ohio, the former chief executive Officer of China Wi-Max Communications, Inc., and Richard Kranitz, 69, a Wisconsin securities attorney who served as an adviser and a member of the board of directors of China Wi-Max, were each sentenced to 18 months in federal prison after pleading guilty to conspiracy to commit securities fraud. 

 

Two other defendants are scheduled to be sentenced over the next several weeks.  Karen Person, 62, of Las Vegas, Chief Executive Officer of the Small Business Company, Inc., is scheduled to be sentenced on August 16.  Person also pleaded guilty to conspiracy to commit securities fraud.  James Prange, 62, of Greenbush, Wis., a self-described financing consultant to small and emerging companies, who, like Jordan, was convicted after trial on multiple counts of conspiracy to commit securities fraud and wire fraud, is scheduled to be sentenced on September 25, 2013.

                               

        The Securities and Exchange Commission, which conducted a parallel civil investigation alongside the FBI undercover operation, cooperated with criminal authorities in bringing these, and charges against 10 other defendants who participated in the kickback scheme.  Six of the defendants have already pled guilty to charges arising out of their involvement in the scheme.

 

        U.S. Attorney Carmen M. Ortiz and Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today.  The case was prosecuted by Assistant U.S. Attorneys Sarah E. Walters, Stephen E. Frank, and Vassili Thomadakis of Ortiz’s Economic Crimes Unit.