accounting, antitrust laws, AP1000, Babcock & Wilcox Enterprises, Brian Ferraioli, Brookfield, Clayton Act, Continental Beverage Brands Corporation, Dolat Ventures, energy, Fox Petroleum, Inc., interlocking directorates, Mammoth Energy Group, nuclear industry, Pump and Dump, Shaw, stocks, Strategic Asset Leasing Inc., Terra Energy Resources Ltd, Toshiba, Vistra, Westinghouse nuclear
Below is a guilty plea by Brian Ferraioli (age approx 40) who may or may not be the nephew (or son) of the apparently older Brian K. Ferraioli (approx in his 60s). The older Ferraioli was CFO and Executive VP of Shaw from the end of July 2007 until Shaw was sold in 2013. “After Westinghouse hired Shaw to handle construction in 2008, it wasn’t long before the company’s work came under scrutiny….” See: https://www.bloomberg.com/news/articles/2017-02-13/toshiba-s-nuclear-reactor-mess-winds-back-to-a-louisiana-swamp He was at KBR (Kellog Brown and Root) from the end of October 2013 until retirement at the end of 2016. About KBR: https://en.wikipedia.org/wiki/KBR_(company) He serves on the board of Vistra Energy and Babcock & Wilcox Enterprises. He is a person of interest to this blog because he serves on the board of Vistra (a company renamed after Chapter 11 Bankruptcy and a story in and of itself) along with Cyrus Madon who is CEO and Senior Managing Partner of (Canadian) Brookfield Business Partners L.P. which is buying the now bankrupt Westinghouse nuclear. They are both accountants. Does this Brookfield (Westinghouse) -Babcock & Wilcox Enterprises-Vistra Energy interlock violate the Clayton act? “In the United States, the Clayton Act prohibits interlocking directorates by U.S. companies competing in the same industry, if those corporations would violate antitrust laws if combined into a single corporation” https://en.wikipedia.org/wiki/Interlocking_directorate There are only two Brian Ferraiolis in the white pages of the USA and both appear to be from the NY-NJ area. Hence, we speculate that they may be kin. If the US government were doing its job it would investigate this older Ferraioli, too. Maybe it’s just accountants of a feather flock together but something smells wrong. Corporations should have to prove that their bankruptcy wasn’t caused by waste and folly before going into Chapter 11. This is clearly not the case so that Chapter 11 has apparently become a way of life for Trump and others. According to Bloomberg, the Brookfield purchase of Westinghouse “won’t include what had been the company’s most prized projects — plans to build its AP1000 reactors for U.S. utilities in South Carolina and Georgia. Those projects, plagued by delays and cost overruns, eventually led to its downfall, and Westinghouse has used the Chapter 11 process to distance itself from any obligations to them.” https://www.bloomberg.com/news/articles/2018-01-04/brookfield-to-buy-bankrupt-westinghouse-for-4-6-billion Despite what the earlier Bloomberg article suggests, it’s not all Shaw’s fault. Ultimately, Westinghouse is liable, though Shaw did own a large chunk of Westinghouse for awhile..
“UPDATE 1-Brookfield Business Partners to buy Westinghouse for $4.6 bln Posted:Thu, 04 Jan 2018 09:57:47 -0500 Jan 4 (Reuters) – An affiliate of Canada’s Brookfield Asset Management said on Thursday it would acquire Westinghouse Electric Co LLC, the bankrupt nuclear services company owned by Toshiba Corp, for $4.6 billion“. http://feeds.reuters.com/~r/reuters/companyNews/~3/cTma9q_va2k/update-1-brookfield-business-partners-to-buy-westinghouse-for-4-6-bln-idUSL4N1OZ3VA
“FOR IMMEDIATE RELEASE
Wednesday, August 9, 2017
New York Man Pleads Guilty to Conspiracy and Tax Offenses Stemming from Stock “Pump and Dump” Scheme
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that BRIAN FERRAIOLI, 40, of Sayville, N.Y., waived his right to be indicted and pleaded guilty today in New Haven federal court to conspiracy and tax offenses stemming from his role in a securities fraud scheme.
According to court documents and statements made in court, between approximately 2009 and July 2016, FERRAIOLI conspired with others, including Christian Meissenn, William Lieberman, Damian Delgado and Thomas Heaphy, to defraud investors through a stock “pump and dump” scheme.
FERRAIOLI and his co-conspirators induced investors to purchase securities by making false and misleading representations in calls, emails and press releases concerning the securities and the issuing companies, thereby causing the price of those securities to become falsely inflated.
The issuing companies, which were essentially shell companies with virtually no legitimate business activities, included Terra Energy Resources Ltd. (stock symbol “TRRE”); Mammoth Energy Group, Inc. (stock symbol “MMTE”), a company that later became Strategic Asset Leasing Inc. (stock symbol “LEAS”); Trilliant Exploration Corporation (stock symbol “TTXP”); Hermes Jets, Inc. (stock symbol “HRMJ”), which later became Continental Beverage Brands Corporation (stock symbol “CBBB”); Dolat Ventures, Inc. (stock symbol “DOLV”), and Fox Petroleum, Inc. (stock symbol “FXPT”).
FERRAIOLI’s numerous misrepresentations induced investors to purchase securities, thus causing the share price of the securities to become artificially inflated. Certain of FERRAIOLI’s co-conspirators then sold their own preexisting positions in the securities at a profit. They then allowed he price of the securities to fall, leaving investors with worthless and unsalable stock. As a result, victim investors lost approximately $19.5 million.
FERRAIOLI received approximately 25 percent of all money that he induced individuals to invest. His personal gain from the scheme totaled approximately $1.25 million. FERRAIOLI disguised the income by having the funds flow through the trust accounts of various attorneys, including Corey Brinson in Connecticut, into bank accounts in the name of various shell entities under FERRAIOLI’s control. FERRAIOLI’s failure to pay taxes on approximately $1.1 million in income from this scheme, as well as unrelated income, during the 2010, 2012, 2015 and 2016 tax years resulted in a loss of $305,733 to the Internal Revenue Service.
FERRAIOLI pleaded guilty to one count of conspiracy to commit mail and wire fraud, which carries a maximum term of imprisonment of 20 years, and one count of tax evasion, which carries a maximum term of imprisonment of five years. He is scheduled to be sentenced by U.S. District Judge Jeffrey A. Meyer on November 6, 2017.
At sentencing, FERRAIOLI will be ordered to pay restitution to his victims, as well as back taxes, interest and penalties to the Internal Revenue Service.
On November 8, 2016, Meissenn, also known as “Christian Nigohossian,” of Suffield, Conn., pleaded guilty to one count of conspiracy to commit mail and wire fraud and one count of tax evasion. He awaits sentencing.
On January 20, 2017, Brinson, of Hartford, pleaded guilty to one count of engaging in a monetary transaction in property derived from specified unlawful activity. On April 13, 2017, he was sentenced to 36 months of imprisonment.
Lieberman, Delgado and Heaphy each previously pleaded guilty to one count of conspiracy to commit mail and wire fraud and one count of tax evasion. They await sentencing.
This ongoing investigation is being conducted by the Federal Bureau of Investigation, Internal Revenue Service – Criminal Investigation Division and U.S. Postal Inspection Service, with assistance from the Connecticut Department of Banking and the Hartford and Stamford Police Departments. This case is being prosecuted by Assistant U.S. Attorneys Avi M. Perry and Peter S. Jongbloed.
Citizens with information that may be helpful to this ongoing investigation, or who believe they may have been victimized by this scheme, are encouraged to contact the FBI at (203) 777-6311.
Securities, Commodities, & Investment Fraud
USAO – Connecticut”
SENTENCING IS IN MARCH.