The SEC seal hangs on the wall of the SEC headquarters in Washington.
Jonathan Ernst | Reuters
A Minnesota man charged this month with securities fraud under a scheme to kidnap dormant mailbox companies may also recently have taken control or attempted control of a penny stock company in Florida, court records suggest.
Federal attorneys and the Securities and Exchange Commission accuse Mark Miller in separate criminal and civil lawsuits filed in Minnesota federal court this month of using forged documents to take over inactive mailbox companies and falsely raise their stock prices before hitting millions of dollars Has sold shares at a profit.
Miller, a 43-year-old general contractor, resides in Breezy Point, Minnesota, where he served on the City Council until he stepped down days after his indictment.
According to prosecutors, Miller, his co-defendant Saied Jaberian in the criminal case, and an unidentified relative of Miller actually became the nominal CEOs and presidents of the companies affected by the alleged fraud.
Civil court documents filed in Florida since February indicate that a Minnesota man of the same name, Mark Miller, was involved in efforts to acquire another dormant mailbox company, New World Gold Corp..
New World Gold Corp, which purports to mine gold ore, is not one of seven companies identified as targets of Miller’s alleged plan in federal criminal or SEC civil proceedings pending in federal court in Minnesota.
But Florida court records, press releases, and social media activity surrounding New World Gold reflect allegations against Miller and his two co-defendants in the “pump-and-dump” system described by federal attorneys and securities regulators in the Minnesota court.
New World Gold’s shares have soared in both price and trading volume in the past few months since a man named Mark Miller filed suits in a Florida court to control the company.
The day after CNBC announced the criminal charges against Miller on June 18, New World Gold issued a statement on Twitter alleging that “Mark Miller” was not affiliated with the company.
New World Gold did not say that the “Mark Miller” associated with the company in court records is a different Mark Miller from the one indicted in Minnesota.
A number of people who follow the company on stock exchange forums indicated that the company had also failed to explain why it would refuse to associate with Mark Miller if that person was not the person charged in Minnesota.
Robert Lengeling, Miller’s Minnesota criminal defense attorney, declined to comment, and his client did not respond to CNBC’s requests for comment.
‘Pumps and Tilts’
Minnesota prosecutors say Miller targeted at least four mailbox companies in the plot that is the subject of indictments against him and his co-defendants in the Jaberian and Christopher James Rajkaran criminal case.
The indictment states that the men allegedly used fake dismissals from company officials to take control of the dormant companies.
They then made false or misleading statements through press releases and social media, as well as through the SEC’s own public filing system, EDGAR, alleging that the companies were alleged to have attractive new business opportunities.
Miller and his alleged co-conspirators bought millions of shares in these companies, often for less than a dime, and then sold those shares after driving the share price up with their fraudulent claims, the indictment reads.
Prosecutors believe Miller and his staff made hundreds of thousands of dollars in illicit profits from the alleged plan, a US attorney spokeswoman in Minnesota told CNBC.
The companies were identified in the indictment as Digitiliti, Encompass Holdings, Bell Buckle Holdings, and Utilicraft Aerospace Industries.
The SEC, in its June 18 civil lawsuit against Miller alone, identified three other penny stock companies believed to be similarly targeted by Miller, along with the four identified in the criminal case. These three companies are Bebida Beverage Company, Simulated Environment Concepts, and Strategic Asset Leasing.
Miller and New World Gold
All seven companies, like New World Gold, had been inactive before Miller dealt with them, the court records say.
The Florida Division of Corporations database stated that New World Gold was re-added to this database on June 4, after being inactive for more than five years.
The company’s shares are publicly traded over-the-counter. New World Gold is listed by the OTC Markets Group on its “Pink” platform with the warning “No information”. The “Company may not make material information publicly available,” said the warning.
The company has no record of filings with the SEC, including any company’s quarterly and annual financial statements, changes in management positions, and other documents typically used by professionals and investors to help make informed decisions about buying or selling stocks.
New World Gold’s reappearance in the Florida state corporate database came almost four months after someone named Mark Miller, who identified himself as a Minnesota resident, filed a lawsuit against New World Gold in Palm Beach County, Florida hold a shareholders’ meeting.
A Palm Beach County judge upheld the motion in April and ordered a shareholders’ meeting to be held on May 27, court records show.
Miller said in a June 17 court case that during that shareholders meeting “a motion was made to remove an existing director (who is physically incapacitated) and elect Mr. Miller as director.”
The same filing claims that shareholders unanimously voted in favor of Miller being elected director.
New World Gold claimed in a June 11 press release that it had acquired a Wyoming mining company with access to gold and lithium.
Lithium is a material that is used in batteries for personal electronics as well as electric vehicles.
A week later, on June 18, a press release claimed that New World Gold had identified properties for mining in Nevada and South Dakota.
The company announced in a press release last Friday that it “officially acquired” a placer claim in South Dakota.
Miller was mentioned as CEO of New World Gold in posts on Twitter, Stocktwits, Reddit, and Investors Hub.
“$ NWGC Power Hour definitely still to buy. I bought more of this little dip !! I have confidence in the new CEO, Mark Miller,” a Twitter user said on June 1st.
“I think we’re getting a lithium announcement with $ nwgc,” tweeted another user on June 3rd.
“I followed the CEO on Twitter, Mark Miller … I expect him to drop BOMBS tomorrow !!!”
But the company tweeted on June 4 that it had named Ohio attorney Bob Honigford as its CEO and director.
A search for Honigford in the SEC document database returned no results. He did not respond to requests from CNBC for comment.
“So no Mark Miller …” said one user on a Reddit forum called NWGCShareholders.
“This is terrible news,” added another user.
“Mark was the guy who caught investor attention and reinstatement. Bob actually does business in this area, ”said another user on the same thread.
New World Gold’s share price peaked at around 4 cents on June 3.
But last Friday it was trading for less than a cent. That was still more than 8,000% higher than its 52-week low in December prior to the Mark Miller lawsuit.
The average 30-day trading volume of New World Gold shares is more than 146 million shares, which change hands every day.
New World Gold answers
After CNBC reported on Miller’s indictment, New World Gold tweeted that Miller was not affiliated with the company despite allegations to the contrary in the Palm Beach County complaint.
“Miller has no control over the company’s operations or press releases and is NOT involved in any future expansion of the operations,” New World Gold tweeted on June 19.
David Rothstein, the attorney who represented Mark Miller in the Palm Beach County New World Gold trial, also did not respond to a request for comment.
CNBC was unable to contact New World Gold at the email address provided in its press releases.
The SEC did not respond to CNBC’s request for comment.
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