March 16, 2013: Luis Carrillo and Wade Huettel, partners in San Diego law firm and Pump & Dump incubator, Carrillo Huettel, were among several charged by the SEC on Friday, for their part in the international Pump & Dump of Pacific Blue Energy Corporation (PBEC) and Tradeshow Marketing Company Ltd (TSHO).
Others charged in the scheme include the actual law firm itself, Carrillo Huettel, LLP; Canadian stock promoters John Kirk, Benjamin Kirk, Dylan Boyle and James Hinton; Gibraltar Global Securities and its President Warren Davis; Carrillo’s father, Dr. Luis Carrillo; and, the PBEC and TSHO entities, as well as their respective Presidents, Joel Franklin and Luniel de Beer. de Beer also served as the Chairman of PBEC.
According to the SEC’s complaint, the Kirks along with Boyle and Hinton, used misleading promotions to rev up interest in PBEC and TSHO as they dumped their own shares. As with most Pump & Dump schemes, the promoters produced phony hype through the dissemination of false and misleading emails masked as two newsletters, Skymark Research and Emerging Stock Report. The crooks also used “boiler room” sales calls to tout the stocks, falsely claiming that the recommendations were based on independent research by Skymark and Emerging Stock Report.
Carrillo Huettel LLP, Carrillo, Huettel, Gibraltar Global Securities, John Kirk, Benjamin Kirk, Boyle, Hinton, de Beer, Franklin, PBEC and TSHO were all charged for violations of U.S. anti-fraud laws and rules. Those defendants, along with Warren Davis and Carrillo’s father, Dr. Luis Carrillo, were also charged for distributing unregistered shares, in violation of U.S. securities laws.
Within the complaint, the SEC alleges that Carrillo and Huettel were key components of the scheme as they helped the promoters conceal their ownership interests in the companies, drafted misleading public filings, and provided misleading legal opinions. As part of the scheme, the law firm received proceeds of stock sales in the form of phony loans. Franklin and de Beer are accused of being complicit in the scheme by making phony statements about their companies, for which they received secret kickbacks totalling hundreds of thousands of dollars.
We were the first to suggest that the heat was coming down on Carrillo and Huettel as we were the only ones to break the news of the shutdown of the law firm and the disappearance of Luis Carrillo, who is now officially a fugitive. It seems likely (maybe obvious) that these charges are only the first in a series of allegations to be levied upon the law firm and its partners for the many frauds perpetrated against the public and which they had a hand in, including those involving close partner-in-crime, Awesome Penny Stocks. In our opinion, market makers, Wilson Davis & Co., need to start looking over their shoulders as well.