Three Charged in Alleged Grifco International, Inc. Stock Fraud
HOUSTON - Three men have been indicted for allegedly defrauding investors who purchased stock from 2004 until 2007 in a publicly-traded company called Grifco International Inc., United States Attorney Jose Angel Moreno and FBI Special Agent in Charge Richard Powers announced today.
Evan 'Nick' Jarvis, 36, and Jim Dial, 53, both of Houston, and Alex Ellerman, 35, of Chicago, were charged with conspiracy and wire fraud in a eight-count indictment returned by a grand jury on Wednesday, March 3, 2010. Jarvis surrendered himself to federal authorities on Wednesday, March 10, 2010, and has been ordered release on a $100,000 bond. This morning, Dial surrendered himself to federal authorities. He appeared before a U.S. Magistrate Judge today and has also been ordered released on a $100,000 bond. The whereabouts of the third defendant, Ellerman, is presently unknown. A warrant remains outstanding for his arrest. Anyone having information regarding the whereabouts of Ellerman, a white male with blue eyes and brown hair standing 5'11" tall and weighing approximately 200 pounds, is asked to contact the FBI Houston office via telephone number (713) 693-5000 or via e-mail at Houston.firstname.lastname@example.org
or if outside the U.S., contact can be made with the nearest American Embassy or Consulate. Ellerman's photo is below.
The FBI's two-year investigative effort with assistance from the U.S. Securities and Exchange Commission and the Harris County District Attorneyâ€™s Office led to the indictment which alleges that between 2004 and 2007 Jarvis, Dial, and Ellerman issued shares of Grifco stock (GFCI) to themselves, disseminated false and misleading information about the company in an effort to increase the price of the stock and then sold the overpriced stock to unsuspecting investors in the public market place. As a result of the fraud, the indictment alleges Jarvis received $2,096,239; Dial received $1,659,198 and Ellerman received $1,061,205.
All three defendants are charged with conspiracy and six counts of wire fraud. Ellerman is also accused of obstructing a United States Securities and Exchange Commission investigation of Grifco by deleting information from a computer that was subject to a subpoena on Aug. 12, 2008.
The conspiracy charge carries a maximum statutory penalty of five years' imprisonment, upon conviction. Each of the six wire fraud counts carries a maximum statutory penalty of 20 years' imprisonment. The obstruction of justice count also carries a maximum statutory penalty of 20 years' imprisonment.
Assistant U.S. Attorney John R. Lewis will be prosecuting the case.
This law enforcement action is part of President Barack Obama's Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
---Also see allegations of fraud from John Jarvis.