SEC Charges 6 in Overseas Boiler Room Case
Earlier this week the Commission filed a complaint involving a scalping claim against a man who used his Twitter account to manipulate the share price of eight microcap stocks. Now the agency has brought an action against six individuals engaged in foreign boiler room operations that received funds from elderly or retirement age victims who were deceived into putting money into shell companies. SEC v. Booth, Civil Action No. 1:22-cv-1115 (S.D.N.Y. Filed February 9, 2022).
Named as defendants in the action are: Robert Booth, previously charged with conspiracy to commit securities fraud for operating a boiler room; Daniel Wellcome Jr., recently arrested for his role in laundering money generated by various boiler rooms; Michael D’Urso, who apparently failed to appear for testimony during the Commission’s investigation; Anthonella Chiaramonte, the fiancée of Mr. D’Urso and the nominee owner of ATC Holdings and Transfer Corp., an entity used in connection with foreign boiler rooms; Alyssa D’Urso, the daughter of Mr. D’Urso and the nominee owner of BA Management Holding Corp. and Irving Management Transfers and Holdings Corp., two entities used in connection with money laundering from foreign boiler rooms; and Jay Garnock, a friend of Mr. D’Urso and the nominee owner of DT Holdings Management Corp., another entity used in connection with laundering money on behalf of foreign boiler rooms.
Over a period of about nine months, beginning in April 2019 Defendants D’Urso and Welcome laundered over $8 million from about 140 investors defrauded by foreign boiler rooms. One of the boiler rooms was operated by Defendant Booth. That operation generated about $700,000 from about 10 investors.
Victims of the fraudulent conduct in the United States and abroad understood that they were investing in the shares of public companies. They wired their money to New York based shell companies controlled by Defendant D’Urso through nominees that included his daughter, his fiancée and his friend Garnock. When the investor funds came in, Defendant D’Uerso skimmed a portion for himself. Mr. Welcome and his nominees then wired the balance of the funds to overseas boiler rooms. To facilitate the scheme Defendants Chiaramonte, Alyssa D’Urso and Garnock opened bank accounts for the shell companies, deceiving the banks about the nature of the business of the various entities used in the scheme. The complaint alleges violations of Securities Act Section 17(a) and Exchange Act Section 10(b). The case is pending. See Lit. Rel. No. 25326 (February 9, 2022). The U.S. Attorneys Office for the Southern District of New York filed parallel criminal charges.