Sarasota man charged in $6M pump-and-dump scam

A Sarasota resident is one of three people charged with fraud in what authorities call a blank check companies scheme that netted around $6 million in ill-gotten gains.

Alvin Mirman of Sarasota, along with Daniel McKelvey of Foster City, Calif. and Steven Sanders of Lake Worth, “routinely evaded” federal securities laws regarding blank check companies, authorities say. The trio is charged with violating or aiding and abetting violations of the antifraud, reporting, recordkeeping and internal control provisions of the federal securities laws.

Blank check companies generally have no operations and no value other than their status as a registered entity, U.S. Securities and Exchange Commission officals say in a statement. That makes these firms “attractive targets for unscrupulous individuals seeking reverse mergers with clean shells ripe for pump-and-dump schemes,” the release adds.

The defendants, says the SEC, were behind a scheme to offer and sell penny stock in undisclosed blank check companies that were bound for reverse mergers. The defendants misrepresented to the public that these companies were promising startups with business plans. The defendants also installed figurehead company officers while falsely depicting in registration statements and other SEC filings that the companies were pursuing real business ventures under these officers, the release states.

“We allege that McKelvey, Mirman, and Sanders went to extreme lengths to run an illicit supply chain of undisclosed blank check companies, including the complete fabrication of business plans and installation of illusory executives,” says Eric Bustillo, the SEC's Miami Regional Office director, in the release.

The SEC seeks disgorgement of ill-gotten gains for McKelvey, Mirman, and Sanders. The agency also seeks prejudgment interest, financial penalties and permanent injunctions, as well as officer-and-director bars and penny stock bars against the defendants.

The SEC's complaint was filed in the U.S. District Court for the Southern District of Florida. Seven other people were charged in the scheme for assisting it in some fashion, including four people the SEC says were figurehead officers and directors. Those four people agreed to settle their cases in separate administrative proceedings, the release states. Three of those people are from Georgia, and one Edward Farmer, is from Sarasota, according to the release. Those four consented to the SEC orders without admitting or denying the findings.