SEC cracks down on fake company that claims to fight global warming

Amanda Carey Contributor
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Ever heard of CO2 Tech? It turns out that the London-based company, which advertised products and services to combat global warming, is a fraud.

The Securities and Exchange Commission (SEC) has charged seven individuals associated with the company with fraud. The group included fake stock promoters, traders and a lawyer. According to an SEC report, from late 2006 through April 2007, the group raked in $7 million in illicit profits.

“This group of illicit stock promoters sought to hide their scheme behind offshore entities, but their misconduct was exposed by the excellent cooperation of law enforcement agencies here and abroad,” Cheryl Scarboro, associate director in the SEC’s Division of Enforcement, said in a statement.

According to a complaint filed in the U.S. District Court for the Southern District of Florida, the scheme was carried out through a Costa Rican company called Red Sea Management. Red Sea has laundered millions of dollars out of the U.S. from illegal trades.

The Florida complaint also says CO2 Tech touted relationships with other business, such as Boeing, that never existed, lending the company an air of legitimacy.

The seven individuals carried out the scheme by distributing false information via emails and faxes, hiring stock promoters who carried out illegal “matched orders” with Red Sea. In other words, they injected money into a fake account through Red Sea to jump start the market and drive up the stock price.

As a result, according to the SEC, the company’s stock jumped 81 percent in one day.

The individuals charged by the SEC are Jonathan Curshen of Sarasota, Fla.; David Ricci and Ronny Salazar, both of San Jose, Costa Rica; Ariav Weinbaum and Yitzchak Zigdon of Israel; Robert Weidenbaum of Coral Gables, Fla.; and Michael Krome of Lake Grove, N.Y.

Additionally, the Department of Justice has brought charges against the group, with the exception of Ricci.

The exact nature of the services provided by CO2 Tech is unclear. The company described itself as:

[A] U.K.-based company [that] provides cutting-edge, sophisticated anti-global warming technologies along with a full range of expert consulting and environmental products and services to businesses, industries and governments. C02 Tech’s innovative approach provides high quality, maintenance-friendly system solutions that offer cutting-edge technological developments and outstanding reliability to support anti-global warming actions.