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Ex-CEO From Long Island Admits Scheme To Defraud Victims In Sale Of Worthless Stock

A former CEO from Long Island admitted to stealing more than $2 million as part of a scheme to defraud the elderly.
A former CEO from Long Island admitted to stealing more than $2 million as part of a scheme to defraud the elderly. Photo Credit: File

A former CEO from Long Island admitted to his role in a scheme to defraud the elderly victims in the sale of worthless stock.

Dix Hills resident Keith Orlean - also known as “Jack Allen” - pleaded guilty in district court to participating in a scheme to target elderly persons to solicit purchases of stock in a series of valueless companies through a variety of lies and misrepresentations.

U.S. Attorney Geoffrey Berman said that for several years, Orlean and his co-conspirators operated a fraudulent scheme in which a salesman named “Mike Palmer” would call elderly people and offer them a “time-sensitive opportunity to buy stock in certain companies.”

Berman said that there was no “Mike Palmer,” and the salesman was one of Orlean’s two co-conspirators, who took turns using the faux alias. The alleged time-sensitive investments were also fabricated by the three men, and the money went to companies they controlled.

“In one intercepted phone conversation, a co-conspirator described to Orlean his strategy for a successful investor sales pitch as:  ‘You ram it down their f—-ing throat,’” Berman said. “In another intercepted call upon learning that a particular victim investor died, the co-conspirator remarked: ‘I knew I should have pulled the last $10,000 out of him.’”

According to the FBI, since April 2014, Orlean and his conspirators convinced more than 50 elderly people to purchase stock in companies based on false representations. In total, they solicited more than $2 million.

Orlean, 61, pleaded guilty to one count of conspiracy to commit securities fraud and one count of securities fraud. When he is sentenced on Jan. 10 next year, he will face up to 20 years in prison.

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