John Schroyer
A former owner of publicly traded Cannabiz Mobile pleaded guilty last week to one count of securities fraud in connection with a pump-and-dump scheme he and at least one other collaborator executed nearly 10 years ago.
Massachusetts resident Christopher Esposito was charged last year with selling 1.3 million shares of fraudulently obtained stock in Cannabiz Mobile Inc., which he failed to register with the U.S. Securities Exchange Commission, according to a press release from the Massachusetts U.S. Attorney’s office.
Esposito took over the company in 2012, when it was still operating under the name ReBuilder Medical Technologies Inc, and rebranded it to Lion Gold Brazil Inc., before running the illegal promotional scheme to boost the stock value in 2014.
Esposito and his partner, Anthony Jay Pignatello, used “backdated promissory notes to fraudulently obtain free-trading shares in the company,” according to the release. The pair also installed a straw man puppet as president and CEO of the company, but “in reality, the executive reported to Esposito,” according to the release.
Pignatello already pleaded guilty in 2021 the same case and is slated to be sentenced on Sept. 12. Esposito will be sentenced on July 26 and faces up to 20 years in prison, a fine of $5 million, and three years of supervised release.
Prosecutors originally charged Esposito with four counts of securities fraud but dropped all but one after the two sides reached a plea deal, under which prosecutors will recommend a lower sentence for Esposito, along with restitution of $62,000 and forfeiture of about $20,000, Law360 reported.
