RCMP hunt nets suspect in alleged stock-pump fraud

A "pump and dump" scheme is one that involves artificially inflating the price of a stock or other security through phoney promotion in order to sell at an inflated price. The OSC issued cease-trade orders against Mitton, Ciaverella and related companies in the trading of Pender shares. The RCMP has said that since authorities recognized the threat early, they were able to avert a potentially massive fraud.

The Toronto Star
January 30, 2007

RCMP hunt nets suspect in alleged stock-pump fraud
Key figure Mitton arrested late Friday, ending long pursuit.
Tony Van Alphen

Michael Lee Mitton was wanted on a Canada-wide warrant after charges were laid in September.
20070130 RCMP hunt
The RCMP has arrested Michael Lee Mitton, a key figure wanted in connection with a major "pump and dump" stock manipulation scheme uncovered last fall.

Officers apprehended the short, stocky Mitton, who had been a fugitive for almost four months, on Friday night in downtown Toronto only hours after the RCMP posted his picture on its most-wanted list, a spokesperson for the force said.

"The RCMP's IMET (integrated market enforcement team) arrested him without incident," said Sgt. Michele Paradis, who is responsible for RCMP communications in Ontario.

Paradis would not disclose other details about Mitton's capture.

Mitton, who has spent time in prison for some of more than 100 fraud-related convictions, faces charges of fraud over $5,000, conspiracy to commit fraud over $5,000, possession of the proceeds of crime, money laundering and two counts of extortion in connection with Pender International in Markham.

A justice of the peace remanded Mitton, 47, of Ottawa into custody during the weekend until another hearing on Friday when the Crown will likely argue he should remain in jail because he is a flight risk.

The RCMP had charged Mitton and two other individuals last September following an 18-month investigation into activities of Pender, which traded on the National Association of Securities Dealers Over the Counter Bulletin Board. Mitton was charged while he was a fugitive.

Aneillo (Neil) Peluso, 47, of King City, faces charges of fraud over $5,000, conspiracy to commit fraud over $5,000, robbery, assault causing bodily harm and two counts of extortion.

Police also charged Michael Ciavarella, 44, of Markham with fraud over $5,000, conspiracy to commit fraud over $5,000, possession of the proceeds of crime, money laundering and two counts of extortion.

A judge released Peluso and Ciavarella on bail at hearings in September with restrictions. There was also a publication ban on all evidence at the hearings.

The RCMP's Toronto IMET, which investigates possible frauds in capital markets, started probing Pender in December 2004 after a referral from the Ontario Securities Commission which had noticed trading irregularities in the company.

Pender's shares had shot up 3,783 per cent from 30 cents (U.S.) on Oct.14, 2004, to $11.35 in 35 trading days, though there was no significant information to explain the jump.

The company's only tangible asset was an indirect ownership in a flooded mine in Northern Ontario.

A "pump and dump" scheme is one that involves artificially inflating the price of a stock or other security through phoney promotion in order to sell at an inflated price.

The OSC issued cease-trade orders against Mitton, Ciaverella and related companies in the trading of Pender shares.

The RCMP has said that since authorities recognized the threat early, they were able to avert a potentially massive fraud.


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Risks: Fugitive from justice, Theft, Assault, Criminal charges, Pump-and-dump scheme, Royal Canadian Mounted Police, RCMP, Conspiracy to commit fraud, Ontario Securities Commission, Proceeds of crime, Money laundering, Legalized extortion, Canada, 20070130 RCMP hunt

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