N.D. (Legal Newsline) – The Department of Justice announced Jan. 6 that Joseph
A. Kostelecky has been charged with operating a $100 million securities fraud
scheme while acting as the vice president of Poseidon Concepts Corp.
announcement were Assistant Attorney General Leslie R. Caldwell of the Justice
Department’s Criminal Division and Inspector In Charge Terrence P. McKeown of
the U.S. Postal Inspection Service’s Washington, D.C., Division.
“The defendant is charged with a $100 million fraud that led
to the collapse of an entire company and harm to thousands of individual
investors,” Caldwell said. “Today’s indictment again makes clear the
department's commitment to protecting the investing public against those who
manipulate the markets to enrich themselves.”
November 2011 and December 2012, Kostelecky – who was the sole executive in the
company’s U.S. division – allegedly helped falsely report roughly $100 million in revenue.
Kostelecky claimed the revenue came from contracts with oil and natural gas
companies and directed accounting staff to record the revenue, assuring them
that it was collectable revenue.
When the inflated revenue came to light at the
end of 2012, the company’s stock dropped – shares lost
close to $1 billion in value. The company was forced into bankruptcy.