BISMARCK, 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.

 

Making the 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.”

 

Between 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.

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