Feds want to seize Keuka Lake home, cars
A Victor man’s Keuka lakefront home, among other valuable assets, may be seized by the federal government because its January 2008 purchase with $405,000 in cash was tied to money laundering, according to documents filed in the Western District U.S. Court in Rochester.
Christopher Wheeler, who runs a penny stock website (www.OTCStockExchange.com) is also being sued by the federal Securities and Exchange Commission for alleged fraud.
In addition to the Keuka Lake home, properties that could be seized by federal authorities based on a certificate of service filed on Jan. 27 include:
• A house at 6715 Golf View Rise, Victor, reportedly valued at $603,000.
• $52,322.24 from a bank account
• A 2003 Ferrari Modena 360, which he purchased in May 2008 for $147,067
• A 2008 Honda CR-V, which he purchased in July 2008 for $23,900
• A 2007 BMW M6, which he purchased in September 2007 for $115,196
• A 2008 Hummer H2, which he purchased in December 2007 for $34,638
A judge still needs to order the properties to be seized.
In papers filed by the SEC Jan. 14 in the U.S. District Court, Southern District of New York, Wheeler is accused of failing to disclose that he was being paid by certain issuers to promote their stock while selling millions of his own shares for profits in the millions.
The amended complaint filed in the Western District Court on Jan. 21 alleges that between June 2007 and October 2008, Wheeler received at least 6.8 million shares of four companies’ stock in exchange for promoting the companies’ stock on the website. As a result, according to the complaint, Wheeler deposited about $7.6 million into his bank account. More than $4 million was from the sale of stocks from the four companies that he fraudulantly promoted, the complaint alleges.
Wheeler, who has not reponded to requests for comment, paid nearly $1.4 million to advertise his website on Google and Yahoo, according to the complaint.
The SEC alleges that Wheeler received compensation at various times in 2007 and 2008 to promote several thinly-traded stocks on his website, which promised to afford investors an opportunity to “make a fortune.”
After receiving millions of shares in undisclosed compensation from issuers, Wheeler is accused of featuring the issuers’ stock on his website, recommending that investors buy them, and posted lofty predictions for the stock without any reasonable basis for the projections.
These promotional efforts caused “dramatic but temporary” increases in the value of the stocks, which Wheeler then sold from his personal brokerage account, the SEC said.
In a complaint filed Jan. 14 with the U.S. District Court for the Southern District of New York, theSEC claims that Wheeler profited from his undisclosed sale of securities of Infinity Medical Group, Inc.; Solei Systems, Inc., Cannon Exploration, Inc.; and China Jiangsu Golden Horse Steel Ball Inc.
The SEC further alleges that Wheeler transferred at least $450,000 to North Coast Advisors, LLC.
North Coast Advisors, LLC, based in Rochester, and OTCStockExchange.com are also named in the complaint.
The SEC seeks to permanently bar Wheeler from participating in any offering of penny stocks, requiring the defendants to pay financial penalties and disgorge all “ill-gotten gains plus prejudgment interest.”
Includes reporting by Mike Maslanik, GateHouse News Service.