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Federal authorities allege three-time felon ran ‘pump and dump’ fraud from behind bars

Published May 04, 2018

Eddy Ubaldo Marin has served three stints in prison – and he could be headed for a fourth – after being charged by federal prosecutors with running a $1 million “pump and dump” securities fraud scheme.

At least part of the scheme was conducted while Marin was serving time in federal prison in Miami, prosecutors allege.

The U.S. Attorney’s Office for the Southern District of Florida said Marin, along with Shane R. Spierdowis, artificially inflated the value of shares in Sunrise-based Valentine Beauty (OTC: VLBI). They were charged by information, which usually means the defendants have agreed to settle the case.

Fort Lauderdale resident Marin, 56, arranged to secretly obtain a controlling interest in Valentine Beauty in November 2013 by issuing shares to Green Tree Capital, a company that Marin controlled, according to federal authorities. This was problematic because Marin was a convicted felon and his ownership was not disclosed to the public. 

Marin was sentenced to 57 months in prison after a 1990 trafficking conviction and sentenced to one year in 2000 for money laundering. In 2014, he was sentenced to 10 months in prison for obstruction of justice for secretly selling jewelry that belonged to Kim Rothstein, the wife of convicted Ponzi schemer Scott Rothstein

Fort Lauderdale attorney Michael J. Entin, who represented Marin in the Rothstein case, didn’t respond to a request for comment.

In 2013, Marin was one of six people charged by prosecutors in Broward County with running a $3 million RICO fraud scheme involving stocks. That case remains pending.

While serving his time in federal prison in Miami in 2014, Marin was visited multiple times by Boca Raton resident Spierdowis, 27, and the men coordinated the sale of Valentine Beauty stock, according to prosecutors. 

Starting in late 2013, Marin transferred the shares of Valentine Beauty to Spierdowis and other co-conspirators, prosecutors allege. Spierdowis would sell shares of Valentine Beauty with one company while sending out marketing newsletters and email marketing with a separate company in an effort to inflate its stock price, according to prosecutors.

After Marin was released from prison in April 2015, Marin and Spierdowis were planning to conduct a reverse merger of Valentine Beauty and change its name, prosecutors allege. The SEC suspended trading of Valentine Beauty shares in April 2016.

The SEC recently filed a civil action against Marin and Spierdowis regarding the alleged “pump and dump” scheme.

Marin faces up to 20 years in prison and a $5 million fine. Spierdowis faces up to five years in prison and a fine of either $250,000 or double the gross proceeds of the offense. Assistant U.S. Attorney Jerrob Duffy is prosecuting the case.

The federal information said Marin approached the CEO of Valentine Beauty in November 2013 with this proposed method of raising capital for the company. The CEO was not charged. The company sells beauty supplies.