Boiler room operators Ronald Hardy and Dennis Verderosa are going to prison. The federal court in New York has sentenced Hardy to 10 years in prison and Verderosa to 6 years in prison. The two ran a $147 million pump and dump scheme that defrauded investors in publicly traded companies.

Hardy was a manager of a boiler room operation. Dennis Verderosa was a cold-caller and account executive at the boiler room.

Between January 2014 and July 2017, Hardy and 15 co-defendants ran a pump and dump scheme that defrauded investors in publicly traded companies by artificially inflating the price and trading volume of stock of the companies. They also mislead victim investors about the company’s potential profitability. Several of the boiler room operators controlled stock in the manipulated companies.

As a result, they profited while the victim investors lost millions of dollars after the stock prices plummeted.

Boiler room operators posted a sign in the dialing center that read:

WE’LL POUND THE PHONE AND WITH A LITTLE BIT OF LUCK, WE’LL MAKE A TON OF MONEY AND WON’T GIVE A F—. 

Federal Judge Throws The Book At Boiler Room Operators

The court ordered Hardy to forfeit the contents of a bank account and two properties he owned in Florida. The judge also ordered Verderosa to forfeit $341,883 he earned from the scheme.

The court will determine the amount of restitution to the victims at a later date.

Hardy pleaded guilty in August 2018 to conspiracy to commit securities fraud, conspiracy to commit wire fraud, substantive securities fraud and money laundering. Verderosa also pleaded guilty in April 2018. He pleaded guilty to conspiracy to commit wire fraud.

Ten other co-defendants have also pleaded guilty and are awaiting sentencing.

United States Attorney Richard P. Donoghue announced the sentences:

Hardy and Verderosa have been punished for luring vulnerable victims into a web of lies in order to steal their life savings. This Office will continue working tirelessly with our law enforcement partners to protect investors from calculating con-men.

Ten co-defendants have also pleaded guilty and are awaiting sentencing.

Previously, co-defendant Emin Cohen was sentenced to two years’ imprisonment and McArthur Jean to four years’ imprisonment for their roles in the scheme.