August 9, 11

NEWS / Stock Promoter Receives Jail Sentence in Manhattan Federal Court for Conspiracy to Commit Securities

PREET BHARARA, the United States Attorney for the Southern District of New York, announced that JOHN ZANIC was sentenced today to one year in prison for participating in a scheme to provide secret bribes to a stock broker in order to induce the broker to purchase a stock on behalf of his clients. The sentence was imposed in Manhattan federal court by United States District Judge BARBARA S. JONES.

According to public filings and proceedings:

From March 2008 through September 2008, ZANIC, and others, schemed to defraud investors in Guyana Gold Corporation (“Guyana Gold”) by paying secret bribes to an undercover FBI agent posing as a middleman who would cause various stockbrokers to have their respective retail brokerage customers purchase Guyana Gold common stock. As part of the sting operation, the undercover agent agreed to recruit stockbrokers who were prepared to buy Guyana Gold common stock from ZANIC and his coconspirators and sell the stock to the brokerage firm’s retail customers. In exchange, the stockbrokers and undercover agent posing as the middle man were to receive secret, cash payments for their roles in the deal respectively totaling approximately 23 and 7 percent of the value of the stock sold to customers. From May through August 2008, ZANIC and his co-conspirators paid the undercover agent and the purported “stockbrokers” whom the agent had purportedly recruited, bribes totaling approximately $21,800. The bribes represented 30 percent of the nearly $75,000 worth of Guyana Gold stock the recruited “stockbrokers” had purchased in trades.

Additionally, on September 3, 2008, ZANIC wired $100,000 to the undercover agent. This payment constituted a cash bribe to induce the undercover agent to cause stockbrokers working with him to breach their fiduciary duty to their customers by purchasing $300,000 worth of Guyana Gold common stock shares in exchange for additional undisclosed compensation.

ZANIC, 50, of Las Vegas, Nevada, previously pleaded guilty in Manhattan federal court before Judge JONES to one count of participating in a conspiracy to commit securities fraud and commercial bribery. In addition to his prison term, Judge JONES sentenced ZANIC to two years’ supervised release, ordered him to forfeit $20,000, and imposed a $5,000 fine.

The charges against ZANIC are the result of a wide-ranging FBI undercover investigation of related stockbroker bribery schemes involving US-based, Canadian-based, and Costa Rican-based stock promoters and stockholders. Mr. BHARARA praised the work of the FBI, the Vancouver Integrated Market Enforcement Team of the Royal Canadian Mounted Police, the Vancouver Police Department, the Criminal Prosecution Assistance Group of FINRA, and the United States Securities and Exchange Commission for their assistance in this investigation.

This case was brought in coordination with President BARACK OBAMA’s Financial Fraud Enforcement Task Force, on which Mr. BHARARA serves as a co-chair of the Securities and Commodities Fraud Working Group. President OBAMA established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

This case is being handled by the Office’s Securities and Commodities Fraud Unit. Assistant U.S. Attorney JULIAN J. MOORE is in charge of the prosecution.

http://www.fbi.gov/newyork/press-releases/2011/stock-promoter-receives-jail-sentence-in-manhattan-federal-court-for-conspiracy-to-commit-securities-fraud-and-commercial-bribery

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