Rancho Santa Fe consultant pleads guilty to conspiracy to commit securities fraud
By City News Service
A self-employed Rancho Santa Fe consultant pleaded guilty June 18 to a federal charge of conspiracy to commit securities fraud in connection with Florida-based penny stock company iTrackr.
David Bahr, 54, will be sentenced Sept. 3 by U.S. District Judge Larry Burns.
Bahr admitted that he agreed with others to manipulate and artificially inflate the price of iTrackr shares in order to make money for himself and his client-investors whom he advised.
Bahr bought shares of iTrackr, and advised others to do so, in order to keep up the price of iTrackr stock, and arranged for the dissemination of promotional material that overstated the likelihood of iTrackr’s success and future profits, according to the plea agreement.
The defendant’s guilty plea coincides with charges filed June 18 by the Securities and Exchange Commission in connection with the same conduct.
Last November, Bahr spoke on the phone with an undercover FBI agent posing as a businessman who could arrange for stockbrokers to secretly invest their clients’ money in iTrackr in return for a 30 percent kickback.
The undercover agent told Bahr that the kickback would not be disclosed to the brokers’ clients, and that he could ensure that the shares would be held for about one year, thus keeping the shares off the market and avoiding any sales that would decrease the price, court papers show.
Bahr agreed to the plan, and agreed to pay the kickback, according to the government. He told the undercover officer that in order to reach his desired share price, he wanted the brokers to buy 10 million shares of iTrackr at an average price of 25 cents per share for a total investment of $2.5 million. Bahr, in turn, would pay a kickback of $750,000.
Prosecutors said Bahr and the undercover agent agreed to do a test run.
On various days last December, the undercover agent, using FBI funds, made an initial purchase of iTrackr stock, and Bahr purchased 135,000 shares of iTrackr stock.
Bahr was satisfied with the purchases, and wired a $3,000 kickback to the undercover officer’s bank account. Days later, federal agents searched Bahr’s home, seizing documents and electronic evidence.