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More stories by this authorA Beverly Hills resident who orchestrated a securities scam through the use of Internet message boards has been sentenced to 15 months in federal prison, said United States Attorney Alejandro N. Mayorkas today.
Arash Aziz-Golshani is accused of conspiring to manipulate the stock of a printing company called NEI Web World. On January 12, his partner Hootan Melamed, also of Beverly Hills, was sentenced to 10 months for the same crime.
Both defendants pleaded guilty to a scheme that profited them $350,000.
According to the United States Attorney's office, Golshani and Melamed made an initial purchase of thousands of shares of NEI Web World stock. Over a period of three and a half months, Golshani purchased 80,000 additional shares for between 5 cents and 13 cents per share. In the weeks before the fraud was discovered, Melamed purchased 50,000 shares of NEI stock at 13 cents per share.
Golshani and Melamed then posted false messages touting the stock's value on Internet bulletin boards operated by Yahoo! and several other Internet companies. The messages stated that NEI would be taken over in a reverse merger. To conceal their identities, the two men used computers at the UCLA Biomedical Library.
Almost immediately, NEI stock skyrocketed to $15.00 per share, and Golshani and Melamed sold their shares for a profit of $350,000.
As soon as market representatives realized the messages were false, NEI plunged down to 25 centers per share, causing a severe lose for other investors.
Both Golshani and Melamed were charged with one count of conspiracy to commit securities fraud and one count of committing securities fraud. Both men will be required to pay restitution to the victims of their scam.
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