MIL-OSI Security: Vancouver Man Sentenced for Role in Penny Stock Fraud

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Source: Office of United States Attorneys

BOSTON – A Vancouver man was sentenced today in federal court in Boston for participating in a conspiracy to defraud investors in the Boston-based biomedical company Endeavor Power Corp.

Marco G. Babini, 62, was sentenced by U.S. District Court Judge Patti B. Saris to time served (approximately two and a half months in prison) and 18 days of supervised release, with the parties deeming the defendant’s eight months of home incarceration prior to sentencing as additional time served. Babini was also ordered to pay a $50,000 fine. In December 2023, Babini pleaded guilty to one count of conspiracy to commit securities fraud and wire fraud.

Babini was indicted by a federal grand jury in Boston in September 2015 along with co-conspirators Edward Withrow III and Samuel Brown. He was arrested in Canada in April 2020, at the request of the United States, and was extradited to the United States in July 2023.

Between approximately July 2012 and March 2013, Babini agreed to participate in a securities fraud scheme involving the planned sale of stock under concealed control during a promotional campaign, a course of conduct commonly known as a “pump-and-dump.” Babini had trading authority over brokerage accounts in Switzerland in the names of nominee entities that held a significant portion of the purportedly unrestricted shares of Endeavor. To raise money to fund a promotional campaign to generate investor demand for the shares, Babini agreed to execute pre-arranged trades with an undercover federal agent. The undercover agent was posing as an individual who had a corrupt network of stockbrokers willing to purchase and hold shares on behalf of their clients in exchange for monetary kickbacks. Babini agreed to execute pre-arranged trades with the goal of raising at least $200,000 and, in December 2012, Babini attempted to execute an initial test trade valued at $20,000.

In May 2018, Withrow pleaded guilty to one count of making false statements to the U.S. Securities & Exchange Commission. Brown separately pleaded guilty in July 2015 to one count of conspiracy to commit securities fraud and wire fraud and one count of making false statements to the SEC. Withrow and Brown were sentenced in December 2018 and January 2019, respectively.

Acting United States Attorney Joshua S. Levy and Jodi Cohen, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division made the announcement today. The U.S. Justice Department’s Office of International Affairs and the Department of Justice Canada’s International Assistance Group provided valuable assistance in securing the extradition of Babini. Assistant U.S. Attorney James R. Drabick of the Securities, Financial & Cyber Fraud Unit prosecuted the case.

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