Two Utahns have entered guilty pleas in Nevada federal court to their roles in a multimillion-dollar fraudulent stock promotion scheme allegedly linked to penny stock mogul Meyer Blinder and convicted Utah stockbroker Michael Wright.
Blaine Chambers, of West Jordan, pleaded guilty Tuesday to one count of securities fraud, and Arthur Rowley Condie, Springville, entered a plea of guilty Monday to one count of evading reporting requirements on $22,000 he handled in stock transactions.Both men face up to five years in prison and $250,000 fines when they are sentenced in October by U.S. District Judge Lloyd George in Las Vegas.
The pleas came one week before trial. Two other defendants in the case, who have yet to plea and will face trial on Monday, are Arthur Packard Condie, the father of Arthur Rowley Condie, and Cline Campbell, a former Utahn now living in Nevada.
Wright pleaded guilty in February to racketeering conspiracy, stock fraud and mail fraud charges, but has yet to be sentenced.
Condie and Chamber's pleas were the latest development in the government's investigation of Blinder, who heads Blinder, Robinson & Co., a Denver firm that was once the largest penny-stock dealer in the United States.
Documents filed by the Internal Revenue Service named Wright, his alleged business partner Arnold Kimmes, the Condies, and Denver penny-stock brokerage house Blinder Robinson and Co., among others, as targets of a stock-fraud investigation involving several blind-pool corporations allegedly set up by Wright and Kimmes and sold to Blinder.
The court documents allege that the stocks were subsequently sold to investors internationally at grossly inflated prices.
Blinder was indicted by a Las Vegas federal grand jury in February on charges he used his brokerage firm to secretly manipulate blind-pool securities in a multimillion-dollar stock swindle.
Authur Packard Condie and Chambers were also indicted on charges they assisted Wright in carrying out the alleged scam.
According to the indictment, Arthur Packard Condie helped recruit nominees, or people to act as figurehead officers, directors and initial shareholders, of two corporations that were actually controlled by Wright.
The indictment further alleges that on Sept. 15, 1987, Wright gave the elder Condie $130,000 in cash to buy shares being offered in the initial public offerings of the two companies. The shares were to be bought in the names of nominees in Nevada, but Wright would actually control them.
At the Salt Lake International Airport, the Condies were detained when Arthur Packard Condie tried to pass a briefcase containing the cash through security machines. The indictment says Wright then had Chambers and others falsely claim the cash as their own.
The indictment says the Condies took the cash Wright gave them to Nevada and bought cashier's checks and money orders in nominee names payable to the Wright corporations, or, in some cases, had nominees write checks to the corporations and reimbursed them in cash. Then, it alleges, Arthur Packard Condie had nominees sign blank stock powers, effectively returning to Wright the undisclosed control of the shares the nominees had supposedly bought in the companies' initial public offerings.