Three Israel residents, a Washington, D.C.-based attorney and an Israeli auditor and his Maryland accounting firm have been accused of fraud in creating numerous shall companies. About $2.1 million disgorgement and pre-judgment interest was assessed against the parties.In settling charges, the Israelis agreed to be barred from roles in penny stock.The attorney and auditor will be prohibited from practicing before the Securities and Exchange.
The SEC charged the Israelis Sharone Perlstein, Aric Swartz, and Hadas Yaron with creating at least 15 shell companies. The filed phony business plains, appointed nominal offers and directors and conducted a "putative initial public offerings" for some of the shell companies, while instead they continued to control the companies and sold some of them for more than $1.8 million in profits.
The attorney, Jonathan Strum, was accused of assisting in drafting false and misleading registration statements and periodic reports and signing fraudulent opinion letters. CPA Alan Weinberg, an Israeli resident, and his Baltimore, Md.-based accounting firm, Weinberg & Baer were alleged to have issued misleading audit reports for at east seven companies.
Without or admitting or deny the allegations, the defendants agreed to the entry of permanent injunctions, along with the disgorgement and prejudgment interest payments. There totaled $1,656,121.18 for Perlstein; $307,510.15 for Swartz; $106,146.64 for Yaron; $62,899.82 for Weinberg and Weinberg & Baer, jointly and severally; and $33,610.89 for Strum.
The SEC also instituted settled administrative proceedings Simcha Baer, a Maryland-based accountant. He was accused of failing to properly perform and document various engagement quality reviews for audits and interim reviews, and repeatedly back-dating and falsifying documentation subsequently produced to SEC staff.