An Agoura Hills man was among two defendants charged for allegedly conspiring to defraud investors in a multi-year scheme involving the acquisition and sale of securities, it was announced Tuesday.
Jack Edward Daniels, 74, is charged with one count of conspiracy and one count of securities fraud, according to an indictment unsealed Tuesday.
Daniels is expected to be arraigned Friday in Los Angeles federal court.
According to the indictment, Daniels and co-defendant Kalistratos “Kelly” Kabilafkas, 48, of Moorpark, conspired to secretly acquire the freely tradeable shares of a publicly traded shell company that they subsequently rebranded as Airborne Wireless Network.
To acquire the company, Kabilafkas allegedly misappropriated a $474,500 sham charitable donation and used the funds to secretly buy the shell company’s stock.
Following the acquisition, together with Kabilafkas, Daniels — Airborne’s president and sole director — allegedly filed false reports with the U.S. Securities and Exchange Commission to conceal from investors that Kabilafkas secretly held all of Airborne’s stock, court papers show.
Without disclosing Kabilafkas’ acquisition of Airborne’s shares, the defendants allegedly used investors’ funds to orchestrate a multimillion-dollar advertising campaign designed to inflate Airborne’s stock price. During the campaign, Airborne’s share price increased significantly for short periods of time, and Kabilafkas capitalized on the spikes to sell millions of shares of Airborne stock and reap millions of dollars in ill-gotten gains, federal prosecutors said.
If convicted, Daniels and Kabilafkas each face up to five years in federal prison for conspiracy and 20 years for securities fraud, prosecutors noted.