New York - Retired attorney Mori Schweitzer, 76, one of three individuals involved in a scheme to defraud investors of $12 million has been sentenced to one year incarceration, five years probation and ordered to pay up to $12 million in restitution. 

In August 2004, stock promoter Herbert Cannon, a convicted felon, Schweitzer and Steven Staltare, the manager of Global Financial Group in Fort Lauderdale were indicted in federal court in Manhattan for their involvement in a scheme to manipulate four small, publicly traded companies by bribing brokers at Global Financial Group, Inc., over a three year period from 1997 to 2000.  The stock manipulation involved pumping up the price of stock and then selling it, causing the stock price to drop and leaving investors with devalued stock.  This is commonly known as a "pump and dump" scheme. 

The pair devised their scheme to manipulate the stock price of Enterprises Solutions Inc., American ATM Corp., American Casinos International, Inc., and Cybergames, Inc.  They obtained large blocks of securities at little or no cost by claiming to provide investment banking and financial advisory services through a consulting business run out of Canon's home in Boca Raton, Florida.  They deposited the stocks into brokerage accounts in the financial district of New York City that were opened in the names of a network of offshore companies, concealing their ownership.  Stocks were sold and the profits were moved in offshore accounts in Gibraltar and Anguilla.

In order to artificially inflate the price of the stock, Cannon and Schweitzer paid secret bribes to Staltare and other employees at Global Financial Group in order to induce them into to sell the stocks of the four companies.  Secret offshore accounts were opened in order for them to receive the secret bribes.  In total, the indictment had alleged that Cannon and Schweitzer reaped $12 million and Staltare and others were bribed approximately $4 million.

Staltare pled guilty to securities fraud and reported to prison on January 3, 2008 to serve a 32 month prison sentence and was ordered to pay $9,307,176 in restitution.  While waiting for trial, Cannon committed suicide on July 5, 2006.  Schweitzer pled guilty to securities fraud and tax evasion which led to his sentencing.  He failed to file a personal federal income tax return for 1998 and filed false federal personal income tax returns for 1997, 1999 and 2000.

IRS Criminal Investigation spokesperson Joseph Foy added, "This investigation involved uncovering a complex web of secret documentation.  They tried to fool investigators by taking them on a offshore wild goose chase.  Working with its partners in law enforcement, IRS Criminal Investigators were involved to help untangle these secret complex webs to expose the money trails.   Postal Inspectors and the Security and Exchange Commission were instrumental in developing this investigation.  The US Attorney's office in the Southern District of New York prosecuted the investigation.