“You gonna get used to wearin’ them chains after a while.” - The Captain, a character in the 1967 classic film, “Cool Hand Luke.”
Some inmates spend their time at Club Fed pumping weights. David Foley spent his time pumping penny stocks.
At a minimum-security federal prison camp in California, Foley, 61, used phone calls and emails to run a penny-stock pump and dump that put $4.9 million into his and his wife’s pockets, according to regulators.
On Wednesday, Foley was sentenced to six years in prison after duping about 100 investors with shares of two companies he controlled, San Jose, Calif.-based NanoTech Entertainment (NTEK) and Las Vegas-based NanoTech Gaming, (NTGL). The securities traded in the natural habitat of sketchy penny stocks: the over-the-counter market.
While serving a previous fraud sentence at Taft federal prison camp, Foley continued working with a stock promoter and directing family members and employees to promote and sell millions of shares in the companies he controlled.
You’d never know it from the blog post he published in 2015 upon settling into the pokey:
“One of the harshest realizations is that at Age 51 I will be starting over. …
“Gaming licenses are very hard to come by and having a convicted felon on staff would hinder any licenses. That’s just one of the many realities I must face for the mistakes that I made. …
“With no access to the Internet or computers my technical skills and knowledge diminish as each day passes.”
Au contraire.
According to a civil complaint filed by the Securities and Exchange Commission:
“While he was in prison, David Foley continued to control NTEK and NTGL. He made phone calls, sent emails, and sent handwritten letters from prison … containing his instructions regarding company operations, including the hiring and firing of employees and the publication of press releases.”
The SEC complaint also alleged that between February 2014 and October 2016, Foley sold 1.1 billion shares of NTEK and 19.1 million shares of NTGL stock to a Chicago-based securities firm, which resold the shares to the public.
This is quite an accomplishment for a man serving a two-year prison sentence. Just think what he can do with six.
