Investment Scheme Involving Americas Energy Stock & Muskateer Investments: Strebinger and Chapman Charged

The SEC today (November 3rd, 2014) has brought charges against two of Canadian citizens – Strebinger and Chapman. They face charges of orchestrating a complex international microcap fraud scheme. The scheme involved stockpiling a large amount of shares in a Tennessee-based coal mining company and then propagating an extensive promotional campaign to inflate the share price while deceptively selling their own shares through the use of offshore accounts.

The Securities and Exchange Commission claims Bruce D. Strebinger subsequently aided a reverse merger between a private start-up company in Knowville, Tennessee and shell company Americas Energy Company (AECo) with mal intent. Bruce D. Strebinger and Brent Howard Chapman each had allotted for themselves significant positions of over 5% of this common stock disregarding the federal mandate to first publicly disclosing their beneficial (and parasitic) ownership stake.

The alleged Canadian fraudsters, Strebinger and Chapman, heavily promoted the Americas Energy stock to potential investors through multiple advertising media (e.g. email marketing and direct mailing). Their promotional reports not only failed to disclose their ownership stake but was simply fraught with false and deceptive information in an attempt to attract investors and have them purchase massive amounts of shares quickly.

The complain filed by the SEC in the U.S. District Court for the Northern District of Georgia, states that as the Strebinger and Chapman scheme was attracting new money from oblivious investors and the share price of Americas Energy’s was rapidly increasing, the two were discreetly dumping their own shares through a complex network of foreign accounts, offshore corporations, and several financial institutions. The scheme generated more than $17 million pocketed by Strebinger and Chapman.

“Strebinger and Chapman rigged a penny stock in their favor while staging a massive promotional campaign… They disguised their scheme by dumping their shares in relatively small amounts over extended periods of time, and they attempted to hide their proceeds from U.S. regulators by routing them through offshore accounts.” – William P. Hicks, Associate Director for Enforcement in the SEC’s Atlanta Regional Office

The SEC had previously suspended trading in the Americas Energy stock.

In the complaint filed by the SEC, it alleges that Strebinger and Chapman were in clear violation of Section 17a of the Securities Act of 1933, Sections 10b, 13d, as well as 20b of the Securities Exchange Act of 1934, and Rules 10b-5, 13d-1, and 13d-2(a).  In addition to these violations, the SEC also charges Strebinger and Chapman with aiding and abetting each other’s Exchange Act violations.

The complaint also alleges the Muskateer Investments Inc., a facade based out of the Caribbean owned by Strebinger, violated Section 13d of the Exchange Act and Rules 13d-1 as well as 13d-2(a).  It seeks permanent injunctions, disgorgement of illegal proceeds along with prejudgment interest, penny stock bars, fines, an accounting of, and the repatriation of, any proceeds of sold shares which were transferred to any foreign sites. Muskateer Investments Inc and Strebinger’s wife were named as a relief defendant by the SEC comlaint in order to confiscate any illegal proceeds from the scheme at hand that may have been transferred into associated accounts.

The continuing investigation conducted by the SEC out of the Atlanta Regional Office is headed by Aaron Lipson and Lucy Graetz under the supervision of Rhea Dignam and William Hicks  with aid of the Enforcement Division’s Microcap Fraud Task Force.