Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today that KEITH ORLEAN was sentenced today in Manhattan federal court to 32 months in prison for participating in a scheme to use false statements to promote and sell stock in his company. ORLEAN pled guilty on September 26, 2019, to one count of securities fraud and one count of securities fraud conspiracy before U.S. District Judge Vernon S. Broderick, who also imposed today’s sentence.
Manhattan U.S. Attorney Geoffrey S. Berman said: “Keith Orlean and his co-conspirators obtained more than $2 million by taking advantage of innocent investors – many of them elderly – through blatant lies. As this prosecution and today’s sentence reflect, this kind of predatory fraud will not be tolerated.”
According to the allegations contained in the Complaint, the Indictment, and statements made in related court filings and proceedings:
For several years, ORLEAN and his codefendants operated a fraudulent scheme in which a salesman named “Mike Palmer” would call elderly persons on the phone and offer them what he claimed was a time-sensitive opportunity to buy stock in certain companies. In fact, there was no “Mike Palmer,” and the salesman was actually Vladimir Ziskind or Kevin Weinzoff, co-conspirators of the defendant who were taking turns using the fake alias. The purported time-sensitive investment opportunity was also fabricated by the defendants, as the company in which they solicited investments were actually companies under their control. In one intercepted phone call conversation, Ziskind described to KEITH ORLEAN his strategy for a successful investor sales pitch as: “You ram it down their fucking throat.” In another intercepted call between Ziskind and ORLEAN, upon learning that a particular victim investor died, Ziskind remarked: “I knew I should have pulled the last $10,000 out of him.”
The most recent version of the defendants’ phony sales pitch included false representations about an impending initial public offering, or “IPO,” for their company, Digital Donations Technologies, Inc. For example, in April 2018, one of the defendants assured a victim investor that “our company is doing great,” that the company had an offer for an IPO valued at approximately $300 million, and that defendant KEITH ORLEAN was considering a private sale of the company for more than $1.5 billion. In truth, however, the defendants knew that the company had little or no actual commercial value and that no such IPO or sale was taking place.
The Federal Bureau of Investigation (“FBI”) estimates that since April 2014, the defendants have convinced more than approximately 57 persons, many of whom were elderly, to purchase stock in companies controlled by one or more of the defendants based on false representations. During the period of the conspiracy, the defendants successfully solicited more than $2 million in stock purchases from victims.
In addition to a prison term, ORLEAN, 62, of Hauppauge, New York, was sentenced to three years of supervised release, ordered to pay restitution in the amount of $2,080,771, and ordered to pay a forfeiture money judgment in the amount of $883,700.
Vladimir Ziskind and Kevin Weinzoff, who each previously pled guilty to his participation in the scheme, await sentencing.
Mr. Berman praised the outstanding work of the FBI.
The prosecution of this case is being overseen by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Robert Boone and Andrew Thomas are in charge of the case.
USAO – New York, Southern
Jim Margolin, Nicholas Biase