Source: https://www.quackwatch.org/01QuackeryRelatedTopics/Cancer/bachynsky.html
Timestamp: 2019-03-25 00:11:37
Document Index: 187314231

Matched Legal Cases: ['§ 78', '§ 371', '§ 1343', '§ 78', '§ 240', '§ 2']

Indictment of Nicholas Bachynsky, M.D. (2004)
RICHARD A. ANDERS,
NICHOLAS BACHYNSKY,
LAURENCE M. DEAN, and
ARTHUR SCHEINERT,
15 U.S.C. § 78ff(a) 18 U.S.C. ~ 2
At various times relevant to this Indictment:
I. Helvetia Pharmaceuticals. Inc. ("Helvetia") was a Delaware corporation that on or about February 27. 2001, was authorized to conduct business as a foreign corporation in the State of Florida. Helvetia's principal place of business was located in the Southern District of Florida, initially at 3200 University Drive, Suite 21 0, Coral Springs. Florida 33065, and subsequently at 3300 University Drive, Suite 408, Coral Springs, Florida 33065. Helvetia maintained bank accounts at First Union National Bank ("First Union Bank"), which subsequently became Wachovia Bank, and Bank of America, NA.
2. Helvetia was purportedly engaged in the business of treating individuals suffering from cancer with a purported "new" and "unique" cancer treatment involving "intracellular hyperthermia" therapy. The company described its cancer treatment as successful" and explained that it involved the use of a "proprietary 'agent,'" which internally heats malignant tumor cells "to the point they can no longer survive." To purportedly raise capital for this business, the defendants offered and sold securities issued by Helvetia to the general public in the form of stock and notes.
3. Defendant RICHARD A. ANDERS represented himself as Helvetia's President of Investor Relations and was an undisclosed principal of the company. Among other things, RICHARD A. ANDERS managed and supervised Helvetia 's day-to-day domestic sales operations, solicited investors to purchase Helvetia's securities, and accepted and controlled investors' funds. RICHARD A. ANDERS exercised control over Jufari Management Lid. ("Jufari"), a foreign limited partnership, and Lonsdale Consultants Corp. ("Lonsdale"). Jufari; and Lonsdale both maintained bank accounts at First Union Bank, where some investors' monies were deposited purportedly on behalf of Helvetia.
4. Defendant NICHOLAS BACHYNSKY represented himself as Helvetia's Medical Director and was an undisclosed principal of Helvetia. Among other things, NICHOLAS BACHYNSKY, directly and indirectly, solicited investors to purchase Helvetia's securities and "treated" Helvetia patients.
5. Defendant LAURENCE M. DEAN was Helvetia's Chief Financial Officer, Secretary, Treasurer, and a Director of the company. LAURENCE M. DEAN also represented himself as the President of Jufari. Among other things, LAURENCE M. DEAN communicated with Helvetia investors, accepted investors' monies, maintained Helvetia's books and records, and had signatory authority over bank accounts in the names of Helvetia, Jufari, Lonsdale, and a company named Intra-Cellular Hyperthermia, Inc.
6. Defendant ARTHUR SCHEINERT represented himself as Helvetia's Senior Vice-President of Marketing and was a Helvetia sales representative. Among other things, ARTHUR SCHEINERT solicited investors to purchase Helvetia's securities and accepted in investors' monies purportedly on behalf of Helvetia.
(Consplracy: 18 U.S.C. § 371)
1. Paragraphs 1 through 6 of the General Allegations section of this Indictment are re-alleged and incorporated by reference as though fuBy set forth herein.
2. From in or around January 2001, through in or around October 2002, in the Southern District of Florida, and elsewhere, the defendants,
RlCHARD A. ANDERS,
did knowingly and willfully combine. conspire. confederate and agree with each other and with others known and unknown to the Grand Jury, to commit certain offenses against the United States, that is:
(a) to knowingly and willfully devise and intend to devise a scheme and artifice to defraud and to obtain money and property from others by means of materially false and fraudulent pretenses, representations and promises, knowing that they were false and fraudulent: when made, and causing to be delivered certain mail matter by the United States Postal Service or any private or commercial interstate carrier according to the directions thereon, for the purpose of executing the scheme, in violation of Title 18, United States Code, Section 1341;
(b) to knowingly and willfully devise and intend to devise a scheme and artifice to defraud, and to obtain money and property from others by means of materially false and fraudulent pretenses, representations and promises, knowing that they were false and fraudulent when made, and transmitting or causing to be transmitted certain wire communications in interstate and foreign commerce, for the purpose of executing the scheme, in violation of Title 18, United States Code. Section 1343;
(c) to willfully, knowingly, and unlawfully, by the use of means and instrumentalities of interstate commerce, the mails, and the facilities of national securities exchanges, directly and indirectly, use and employ manipulative and deceptive devices and contrivances in connection with the purchase and sale of securities, that is, stock and notes issued by Helvetia, and did (a) employ a device, scheme and artifice to defraud; (b) make untrue statements of material facts and omit to slate material facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; and (c) engage in acts, practices and courses of business which would and did operate as a fraud and deceit upon others, in connection with the purchase and sale of said securities. in violation of Title 15, United States Code, Sections 78j(b) and 78ff{a), and Title 17, Code of Federal Regulations, Section 240.10b-S.
3. The purpose of the conspiracy was for the defendants to unjustly enrich themselves by misappropriating monies from investors for their personal use and benefit by making materially false representations and omitting to state material facts concerning, among other things, the use of investors' funds, Helvetia's ownership rights to a purported cancer treatment, the company's purported imminent initial public offering ("IPO") of its securities, investors' expected returns, the results of medical studies, the criminal and disciplinary histories of RICHARD A. ANDERS and NICHOLAS BACHYNSKY, and the health risks associated with Helvetia's purported cancer treatment.
The manner and means by which the defendants sought to accomplish the objects and purpose of the conspiracy included, among others, the following:
4. The defendants, directly and indirectly, offered and sold stock and notes issued by Helvetia to the general public. Specifically, from in or around January 2001, through in or around October 2002, the defendants, directly or indirectly, raised more than $3,500,000 from at least 50 investors nationwide through the offer and sale of Helvetia's stock and notes, resulting in investor losses.
5. To perpetrate the scheme, the defendants solicited investors by, among others things, making telephone "cold calls," meeting them in person, and obtaining leads from employees and referrals from investors. During investor solicitations, the defendants represented, or caused others to represent, to investors that Helvetia was raising investor monies to operate: a cancer treatment clinic in Switzerland, utilizing a novel drug to treat individuals inflicted with various types of cancer.
6. The defendants, directly and indirectly, led investors to believe that they had the opportunity to invest on "the ground floor" of Helvetia. Specifically, the defendants, directly and indirectly, offered investors the opportunity to purchase Helvetia's stock for $1.00 per share. The defendants falsely represented, or caused others to falsely represent, to investors that Helvetia was about to "go public" through an imminent IPO of its securities and that as a result, Helvetia's stock price would dramatically increase in value.
7. Depending on the investor, the defendants falsely represented, and caused others to falsely represent, that the company's stock price was going to go up to at least "$5.00 to S6.00 per share" and they would make returns on their monies ranging from 400% to 600%.
8. Similarly, the defendants, directly and indirectly, offered notes to investors, which promised to pay the investors fixed annual rates of return on their investments and were convertible into shares of Helvetia's stock. Depending on the investor and the terms of the note, the: defendants, directly and indirectly, promised annual rates of return, which ranged from 8% to 12%.
9. To perpetuate the scheme, the defendants, directly and indirectly, disseminated, or caused others to disseminate, written sales materials and documents to investors to solicit their funds. Investors received Helvetia's sales materials and documents by a commercial overnight carrier service. the United States Postal Service, and directly from the defendants. Helvetia's materials included, among other things, a purported subscription agreement, investment letter, business plan, and Helvetia's bank account wire instructions.
10. Helvetia's business plan explained to investors that, among other things, the company's "primary business" was "the treatment of cancer, in a clinic setting, utilizing a new, unique intracellular hyperthermia therapy methodology," and that the "primary goal" of the company was "to open and manage a full service Intracellular Hyperthermia (IHT) Clinic for the treatment of cancer," To induce investors to invest their monies in this purported business, Helvetia's sales materials represented to investors, among oilier things, that "the Company intends to use the proceeds from the sale of the Securities for working capital and general corporate purposes."
11. Helvetia's materials also described intracellular hyperthermia therapy to investors as a cancer treatment involving a "proprietary "agent, '" which when administered to cancer patients, internally heats their malignant tumor cells "to the point they can no longer survive" while, at the same time, sparing normal tissue and having no toxic effects. The sales materials represented to investors that a "Mayo Clinic trained physician, with a Ph.D. in chemistry, has developed a, . . method to induce safe, practical intracellular hyperthermia," and that Helvetia had "acquired exclusive rights to [this] novel, proprietary therapy for [the] successful treatment of a variety of heretofore-untreatable malignancies (cancer)."
12, In order to invest in Helvetia, the defendants, directly and indirec1tly, required investors to sign Helvetia's subscription agreement and immediately return the agreement with their monies via an overnight commercial carrier service. The defendants, directly or indirectly, accepted investors' monies by either check or wire transfer and caused them to be deposited into bank accounts in the names of, among others, Helvetia, Jufari, and Lonsdale.
13. After accepting investors' monies, the defendants, directly and indirectly, mailed investors either Helvetia stock certificates or promissory notes reflecting their investment. Individuals who chose to invest with Helvetia were passive investors, did not retain the ability to control the profitability of their investment, and expected their investments to generate returns exclusively through the efforts of the defendants.
14. To induce investors to invest money with Helvetia. the defendants provided, and caused others to provide, sales materials and other documents to investors containing numerous false statements and omissions of material facts and the defendants made, and caused others to make, numerous materially false statements to investors, and the defendants omitted to stat,!:, and caused others to omit to state, material facts to investors, including, among others, the following:
a. That investors' funds would be used for the operation of Helvetia's European cancer treatment clinic, working capital, and general corporate purposes when, in truth and in fact, the defendants used investors' funds for other purposes, including their personal benefit and in furtherance of the scheme;
b. That Helvetia had "acquired exclusive rights" to purportedly novel, proprietary therapy for the successful treatment of a variety of cancers, when, in truth and in fact, Helvetia did not acquire the exclusive rights to any such therapy;
c. That Helvetia was about to "go public" through an imminent IPO of its securities and that, as a result, Helvetia's stock price would go up to at least "$5.00 to $6.00 per share" and investors would make returns on their monies ranging from 400% to 600% when, in truth and in fact, the defendants had no reasonable basis to support these representations because, among other reasons: 1) the defendants had not registered an IPO with the United States Securities and Exchange Commission ("SEC"); 2) the future market value of Helvetia's securities as well as investors' expected returns were dependent on, among others things, the existence of a market, economic conditions, liquidity, and Helvetia's profitability; and 3) Helvetia had a limited operating history;
d. That university studies had shown that Helvetia's methodology for inducing intracellular hyperthermia was "extremely effective" in the treatment of variety of cancers and acquired immune deficiency syndrome ("AIDS") cells. More specifically, that the results of laboratory studies relating to intracellular hyperthermia therapy performed under the direction of a professor at Syracuse University demonstrated minimal effects on human cells not infected with AIDS, when, in truth and in fact, no such results were achieved;
e. That the defendants were misappropriating investor funds for their personal use and benefit, including to pay for, among other things, automobiles, home mortgages, and credit card expenses, which included, among other things, airfare, lodging, restaurants, clothe!;, and retail store purchases;
f. That Helvetia's purported cancer treatment involved administering patients with a chemical named 2,4 - Dinitrophenol ("DNP"), which is banned for human consumption in the United States, poses serious health risks, and may cause death. Further, that DNF is used in pesticides, wood preservatives, and the manufacturing of dyes;
g. That some patients who received Helvetia's purported treatment hill! Suffered harmful side effects and that at least one patient had died;
h. That RICHARD A. ANDERS and NICHOLAS BACHYNSKY were principals of Helvetia;
i. That on or about March 1, 1995, RICHARD A. ANDERS was criminally convicted in the case of United States v. Richard A. Anders, Case No. 1:93-CR-506-5-GET (N.D. Ga. November 22, 1993), for having: conspired to commit securities fraud, in violation of Title 18. United States Code, Section 371; committed securities fraud, in violation of Title 15, United States Code, Sections 78j(b) and 78ff and Title 17, Code of Federal Regulations, Section 240.10b-5; committed wire fraud, in violation of Title 18, United States Code, Sections 1343 and 2; and engaged in interstate transportation of monies taken by fraud, in violation of Title 18, United States Code, Section 2314;
j. That on or about December 6, 1995, RICHARD A. ANDERS was permanently barred by the SEC in the case of In the Matter of Richard A. Anders, Securities Exchange Act Rel. No. 34-36553 (December 6, 1995), "from association with any broker, dealer, municipal securities dealer, investment adviser or investment company, effective immediately" and "from participating in an offering of penny stock;"
k. That on or about December 15, 1995, RICHARD A. ANDERS was enjoined by a United States District Court in the case of Securities and Exchange Commission v. Word, et al., Case No. 1:95-CV-2470-GET (N.D. Ga. September 28, 1995 ), from committing further violations of the anti-fraud provisions of the federal securities laws;
I. That on or about January 31, 1987, the Texas State Board of Medical Examiners issued an order to cancel NICHOLAS BACHYNSKY's medical license in Texas in the case of Texas State Board of Medical Examiners v. Nicholas Bachynsky, M. D. because NICHOLAS BACHYNSKY was administering patients with the chemical DNP for the treatment of obesity. Specifically, the order against NICHOLAS BACHYNSKY stated that "2-4 Dinitrophenol is a chemical compound with no proven therapeutic value and usually has a number of harmful and dangerous side effects upon persons who take it;"
m. That on or about July 13, 1989, NICHOLAS BACHYNSKY was criminally convicted in the case of United States v. Nicholas Bachynsky, Case No. H-88-00364-01 (S.D. Tx. October 28, 1985) for having committed racketeering activity, in violation of Title IS, United States Code, Section I 962(e), and conspired to defraud the Internal Revenue Service, in violation of Title 18, United States Code, Section 371;
n. That on or about January 26, 1990, the Texas Stale Board of Medical Examiners revoked NICHOLAS BACHYNSKY's medical license in the State of Texas in the case of In the Matter of the Complaint Against Nicholas Bachynsky. M.D.;
o. That on or about April 30, 1991, the Commissioner of Education of the State of New York issued an order to revoke NICHOLAS BACHYNSKY's medical license in the State of New York in the case of In the Matter of Nicholas Bachynsky (Physician), Vote and Order No. 11475; and
p. That on or about June IS, 2002, Helvetia, RICHARD A. ANDERS, and ARTHUR SCHEINERT were privately sued by a Helvetia investor for, among other things, allegedly committing securities fraud in the ease of Jerome K. Chase. Sr. et al. v. Richard A. Anders, et al., Case No. 02-60848-CIV-SEITZ (S.D. Fla. June I8, 2002) and that, as a result, on or about June 25, 2002, the defendants' used $394,325 in investors' funds to settle the lawsuit.
In furtherance of the conspiracy and to achieve the objects and purpose thereof, at least one of the co-conspirators committed or caused to be committed, in the Southern District of Florida and elsewhere, at least one of the following overt acts, among others:
1. In or around January of 2001, RICHARD A. ANDERS recruited and hired a sales representative to offer and sell Helvetia's securities to investors.
2. On or about February 13,2001, LAURENCE M. DEAN incorporated Helvetia in the State of Delaware.
3. On or about February 27, 200 I, LAURENCE M. DEAN filed Helvetia's application to conduct business in the State of Florida as a foreign corporation.
4. In or about February of 2001, RICHARD A. ANDERS solicited Investor S.K., in person, and induced S.K. to invest $25,000 in Helvetia.
5. On or about March 14, 2001, LAURENCE M. DEAN opened a corporate bank account in the name of Helvetia at First Union Bank.
6. In or around March 2001, NICHOLAS BACHYNSKY telephoned Investor A.S. and solicited A.S. to invest in Helvetia.
7. In or around March or April of 2001, NICHOLAS BACHYNSKY telephoned Investor R.K. and solicited R.K. to invest in Helvetia.
8. In or around April or May of 2001, NICHOLAS BACHYNSKY recruited a sales representative to offer and sell Helvetia 's securities to investors.
9. On or about May 1, 2001, LAURENCE M. DEAN accepted a $10,000 check from Investor M.M. made payable to "Helvetia Pharmaceuticals" and deposited it into Helvetia's First Union Bank account number 2000008260811.
10. In or around the fall of 2001, RICHARD A. ANDERS and NICHOLAS BACIIVNSKY recruited and hired a sales representative to offer and sell Helvetia's securities to investors.
11. In or around October of 2001, ARTHUR SCHEINERT telephoned Investor BJ.L. and solicited B.J.L. to invest in Helvetia.
12. In or around November of 2001, ARTHUR SCHEINERT telephoned Investor R.A. and solicited R.A. to invest $25,000 in Helvetia.
13. In or around December of 2001, RICHARD A. ANDERS, NICHOLAS BACHYNSKY, and LAURENCE M. DEAN entered into an agreement to purpc1rtedly assign future patent rights to Helvetia in exchange for, among other things, $250,000.
14. In or around the winter of 2001, RlCHARD A. ANDERS, NICHOLAS BACHYNSKY, and LAURENCE M. DEAN assisted in the preparation of Helvetia's written sales materials.
15. On or about December 5, 2001, LAURENCE M. DEAN caused a wire transfer in the amount of $12,500, drawn on Helvetia's First Union Bank account number 2000005260811, to he transmitted and payable to First LA Group for, among other things, the preparation of Helvetia's business plan.
16. On or about December 7, 2001, LAURENCE M. DEAN signed check number 1209, drawn on Helvetia's First Union Bank Account Number 2000008260811 and made payable to "Dr. Nicholas Bachynsky" and another individual in the amount of $250,000.
17. On or about January 1 S, 2002, RICIIARD A. ANDERS executed the lease agreement for Helvetia's principal office located in Coral Springs, Florida.
18. On or about January 25, 2002, ARTHUR SCHEINERT accepted a $15,000 check from Investor J.C. made payable to "Arthur Scheinert" for the purchase of Helvetia's stock and caused the check to be deposited into a First Union Bank account in the name of RICIIARD A. ANDERS and ARTHUR SCHEINERT, business account number 101005382879.
19. In or around February of 2002. NICHOLAS BACHYNSKY solicited Investor W.D., in person, provided W.D. with Helvetia's sales materials, and induced W.D. to invest in Helvetia.
20. On or about February 23, 2002, LAURENCE M. DEAN accepted a $10,000 check from Investor W.D. made payable to Helvetia for the purchase of shares of Helvetia's stock.
21. On or about February 27, 2002. LAURENCE M, DEAN caused a S I 0,000 check from Investor W.D., which was made payable to Helvetia for the purchase shares of Helvetia's stock, to be deposited into Helvetia's First Union Bank account number 2000008260811.
22. In or around March of 2002, RICHARD A. ANDERS and I.AIURENCE: M. DEAN solicited Investor A.R., in person, to invest in Helvetia.
23. In or around March and April 2002, RICHARD A. ANDERS telephoned Investor G.W. and solicited G.W. to invest in Helvetia.
24. On or about April 9, 2002, RICHARD A. ANDERS caused Helvetia's written sales materials to be mailed to Investor B.L., via an overnight commercial carrier service.
2S. On or about April 22, 2002, LAURENCE M. DEAN telephoned Investor G.W. to solicit G.W. to invest in Helvetia.
26. In or around May of 2002, RICHARD A. ANDERS solicited Investor S.K. to invest in Helvetia.
27. On or about June 20, 2002, LAURENCE M. DEAN executed a $100,000 note issued by Helvetia and caused it to be sent to Investor R.A.
28. On or about June 21, 2002, LAURENCE M. DEAN opened a corporate bank account in the name of Helvetia at Bank of America.
29. On or about June 26, 2002, LAURENCE M. DEAN accepted a $100,000 investment from Investor R.A. into Helvetia's Bank of America account number 54867B2536.
30. On or about July 12, 2002, LAURENCE M. DEAN signed Helvetia's stock certificates as the company's secretary and treasurer.
31. On or about July 29, 2002, LAURENCE M. DEAN caused Helvetia to send Helvetia stock certificate #145 to Investor R.A. via the United States Postal Service.
32. In or around July of 2002, ARTHUR SCHEINERT telephoned Investor A.H. and solicited A.H. to invest $25,000 in Helvetia.
33. On or about October 4, 2002, LAURENCE M. DEAN telephoned Investor G.H. concerning G.H. 's investment in Helvetia.
COUNTS 2-14
(Mail Fraud: 18 U.S.C. il1341 and 2)
1. Paragraphs 1 through 6 of the General Allegations section of this indictment are re-alleged and incorporated by reference as though fully set forth herein.
2. From in or around January 2001, to in or around October 2002, in the: Southern District of Florida, and elsewhere, the defendants,
LAURENCE M, DEAN, and
did knowingly and willfully devise and intend to devise a scheme and artifice to defraud and to obtain money and property from investors by means of materially false w\d fraudulent pretenses, representations and promises, knowing that the pretenses, representations and promises were false and fraudulent when made, and attempting to do so, did knowingly cause to be delivered certain mail matter by the United States Postal Service and a private or commercial interstate carrier, according to the directions thereon.
PURPOSE OF THE SCHEME AND ARTIFICE
3. The purpose of the scheme and artifice was for the defendants to unjustly enrich themselves by misappropriating monies from investors for their personal use and benefit by making materially false representations and omitting to state material facts concerning, among other things, the use of investors' funds, Helvetia's ownership rights to a purported cancer treatment, the company's purported imminent IPO of its securities, investors' expected returns, the results of medical studies, the criminal and disciplinary histories of RICHARD A. ANDERS and NICHOLAS BACHYNSKY, and the health risks associated with Helvetia's purported cancer treatment.
4. Paragraphs 4 through 14 of the Manner and Means section of Count I of this Indictment are re-alleged and incorporated by reference herein as a description of the scheme and artifice.
5. On or about the dates specified as to each count, the defendants, for the purpose of executing and in furtherance of the aforesaid scheme and artifice to defraud and to obtain money and property from investors by means of materially false and fraudulent pretenses, representations and promises, and attempting to do so, did knowingly cause to be delivered by the United States Postal Service and a private and commercial interstate carrier, according to the directions thereon, the items identified below in each count;
2 February 26, 2001 Helvetia subscription agreement and promissory note sent via Federal Express from the Southern District of Florida to Investor S.K. in San Antonio, Texas.
3 March 2001 Helvetia sales materials, including a subscription agreement, sent via Federal Express from (l1e: Southern District of Florida to Investor A.S. in Northwood, Iowa.
4 April 2001 Helvetia sales materials, including a subscription agreement, mailed from the Southern District of Florida to Investor M.M. in Winter Springs, Florida.
5 November/December
2001 November/December Helvetia sales materials. including a subscription 2001 agreement, sent via a commercial interstate carrier from the Southern District of Florida to Investor B.J.L., in Cedar Falls, Iowa.
6 November 27, 2000 Helvetia subscription agreement and check # 0526, drawn against Investor R.A. 's account, sent via Federal Express by Investor R.A. in Monroe, Wisconsin to Helvetia in the Southern District of Florida.
7 April 2002 Helvetia sales materials, including a subscription agreement, sent via Federal Express from the Southern District of Florida to Investor B. L. in Boynton Beach, Florida.
8 April 2002 Investor G.W. in Aspen, Colorado sent personal checks via Federal Express to Helvetia in the Southern District of Florida.
9 May 30, 2002 Helvetia sales materials sent via Federal Express from the Southern District of Florida to Investor G.H. in Guilderland, New York.
10 July 12, 2002 Helvetia stock certificate #157 mailed from the Southern District of Florida to Investor W.D. in Coral Springs, Florida.
11 July 15, 2002 Helvetia sales materials, including a subscription agreement, sent via Federal Express from the Southern District of Florida to Investor A.H. in San Francisco, California
12 July 18, 2002 Helvetia subscription agreement and check #10818, drawn against Investor A.H.'s account, sent via Federal Express by Investor A.H. in San Francisco, California to Helvetia in the Southern District of Florida.
13 July 29, 2002 Helvetia stock certificate # 145 mailed from the: Southern District of Florida to Investor R.A. in Monroe, Wisconsin
14 August 14, 2002 Helvetia subscription agreement sent via Federal Express from the Southern District of Florida to Investor A.H. in San Francisco, California.
COUNTS 15-25
(Wire Fraud: 18 U.S.C. §§ 1343 and 2)
I. Paragraphs through 6 of the General Allegations section of this Indictment are re-al1eged and incorporated by reference as though fully set forth herein.
2. From in or around January 2001, to in or around October 2002, in the: Southern District of Florida. and elsewhere, the defendants,
ARTIIUR SCHEINERT,
did knowingly and willfully devise and intend to devise a scheme and artifice to defraud and to obtain money and property from investors by means of materially false and fraudulent pretenses, representations and promises, knowing that the pretenses, representations and promises were false and fraudulent when made.
3. The purpose of the scheme and artifice was for the defendants to unjustly enrich themselves by misappropriating monies from investors for their personal use and benefit by making materially false representations and omitting to state material facts concerning, among other things, the use of investors' funds, Helvetia's ownership rights to a purported cancer treatment, the company's purported IPO of its securities, investors' expected returns, the results of medical studies, the criminal and disciplinary histories of RICHARD A. ANDERS and NHCHOLAS BACHYNSKY. and the health risks associated with Helvetia's purported cancer treatment.
5. On or about the dates specified as to each count below, the defendants, for the purpose of executing the aforesaid scheme and artifice to defraud and to obtain money and property from investors by means of materially false and fraudulent pretenses, representations and promises, did knowingly transmit and cause to be transmitted, by means of wire communications in interstate and foreign commerce, certain writings, signs, signals, pictures, and sounds, as more specifically described below:
DESCRIPTION OF WIRE COMMUNICATION
15 March 2001 Telephone call between Investor A.S. in Iowa and NICHOLAS BACHYNSKY in the Southern District of Florida.
16 March/April 2001 Telephone call between Investor R.K. in Minnesota and NICHOLAS BACHYNSY in the Southern District of Florida.
17 April 11, 2001 Wire transfer from Investor R.K.'s bank account in Minnesota, in the amount of $100,000, to Lonsdale's First Union Bank account #2090002896576 in the Southern District of Florida.
18 October 22, 2001 Wire transfer from Investor R.K.'s bank account in Minnesota. in the amount of $350,000, to Helvetia 's First Union Bank account #2000008260811 in the Southern District of Florida
19 October 2001 Telephone call between ARTHUR SCHEINERT in the Southern District of Florida and Investor BJ. L. in Iowa
2001 Telephone call between ARTHUR SCHEINERT in the 2001 Southern District of Florida and Investor R.A. in Wisconsin.
21 March 2002 Telephone call between RICHARD A. ANDERS in the I Southem District of Florida and Investor G. W. in Colorado.
22 June 4, 2002 ire transfer from Investor S.K.'s bank account In New York. in the amount of $35,000. to Jufari's First Union Bank account #1200000627225 in the Southern District of Florida.
23 August 8, 2002 Facsimile transmission letter from Investor G.H. in New York to RICHARD A. ANDERS in the Southern District of Florida.
24 September 9, 2002 Facsimile transmission enclosing documents sent from LAURENCE M. DEAN in the Southern District of Florida to Investor S.K. in New York.
25 October 4, 2002 Telephone call between LAURENCE M. DEAN in the Southern District of Florida and Investor G. H. in New York.
COUNTS 26-40
(Securities Fraud: 15 U.S.C. §§ 78(b) and 78ff(a);
17 C.F.R. § 240.10b-5; and 18 U.S.C. § 2)
1. Paragraphs 1 through 6 of the Genera1 Allegations section and paragraphs 4 through 15 of the Manner and Means section of Count 1 of this Indictment are re-alleged and incorporated by reference as though fully set forth herein.
2. On or about the dates specified as to each count below, in the Southern District of Florida, and elsewhere, the defendants, ;
did willfully, knowingly, and unlawfully, by the use of means and instrumentalities of interstate commerce, the mails, and the facilities of national securities exchanges, directly and indirectly, use and employ manipulative and deceptive device and contrivances in connection with th,: purchase and sale of securities. that is, stock and notes issued by Helvetia. and did employ a device, scheme and artifice to defraud; (b) make untrue statements of material facts and omit it to state material facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; and (c) engage in acts, practices and courses of business which would and did operate as a fraud and deceit upon any person, in connection with the: purchase and sale of said securities, as listed below in each count:
26 February 22, 2001 Investor S.K. invested $25,000 in Helvetia and received a note promising to pay S.K. annual interest of 8%
27 March 15, 2001 Sale to Investor A.S. of 10,000 shares of Helvetia stock for $10,000.
28 April 11, 2001 Investor R.K. invested $100,000 in Helvetia.
29 May 1, 2001 Sale to Investor M.M. of 10,000 shares of Helvetia stock for $10,000.
30 November 27, 2001 Sale to Investor R.A. of 25,000 shares of Helvetia stock for $25,000.
31 December 18, 2001 Sale to Investor B.J.L. of 5,000 shares of Helvetia stock for $5,000
32 February 23, 2002 Sale to Investor W. D. of 10,000 shares of Helvettia stock for $10,000.
March 8, 2002 Sale to Investor A.R. of 10,000 shares of Helvetia stock for $10,000.
34 April 5, 2002 Sale to Investor G. W. of 50,000 shares of Helvetia stock for $50,000.
35 April 8, 2002 Sale to Investor B.L. of 7,000 shares of Helvetia stock for $7,000.
36 April 24, 2002 Sale to Investor G.W. of 25,000 shares of Helvetia stock for $25,000.
37 April 30, 2002 Sale to Investor A.S. of 5,000 shares of I Helvetia stock for $5,000.
38 June 3, 2002 Sale to Investor G.H. of 5,000 shares of I Helvetia stock for $5,000.
39 June 25, 2002 Investor R.A. invested $100,000 in Helvetia and received a note promising to pay R.A. annual interest of 10%
40 July 18, 2002 Sale to Investor A.H. of 25.000 shares of Helvetia stock for $25,000.
All in violation of Title 15, United States Code, Sections 78j(b} and 78ff(a); and Title 17, Code of Federal Regulations, Section 240.10b-5; and Title 18, United States Code, Section 2.
This page was posted on May 14, 2004.