Criminal Indictment — United States v. Milan Patel (N.D. Ga., Dkt. 1, April 19, 2023)
Summary
Criminal Indictment filed April 19, 2023, in the Northern District of Georgia against day trader Milan Patel. Count One charges conspiracy to commit securities fraud: from about October 2017 to about January 2020, Patel, Bart Ross, Mark Melnick, Charles Parrino, Anthony Salandra and others are alleged to have traded short-term call options based on materially false rumors they generated and spread through Trillian chats and market subscription services. It alleges Patel executed at least 100 trades and earned at least $1 million in profits, with trade examples involving International Paper and Pacific Gas & Electric. A forfeiture provision for Counts One through Sixteen seeks a money judgment.
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“Criminal Indictment — United States v. Milan Patel (N.D. Ga., Dkt. 1, April 19, 2023).”
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Case 1:23-cr-00126-LMM-JSA Document 1 Filed 04/19/23 Page 1 of 40
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V.
Criminal Indictment
MILAN PATEL
THE GRAND JURY CHARGES THAT:
Count One
(18 U.S.C. § 371 -- Conspiracy to Commit Securities Fraud)
1. Beginning no later than in or about October 2017 and continuing until in or
about January 2020, the exact dates being unknown, in the Northern District of
Georgia and elsewhere, the defendant, MILAN PATEL, Bart Ross, Mark
Melnick, Charles Parrino, Anthony Salandra, and others known and unknown to
the Grand Jury, did knowingly and willfully combine, conspire, confederate,
agree, and have a tacit understanding with each other to commit an offense
against the United States, namely, securities fraud, that is, to willfully and
knowingly, by the use of means and instrumentalities of interstate commerce, the
mails, and the facilities of national securities exchanges, directly and indirectly,
use and employ manipulative and deceptive devices and contrivances in
connection with the purchase and sale of securities, and did (a) employ a device,
scheme, and artifice to defraud; (b) make untrue statements of material facts and
omit to state material facts necessary in order to make the statements made, in
Case 1:23-cr-00126-LMM-JSA Document 1 Filed 04/19/23 Page 2 of 40
light of the circumstances under which they were made, not misleading; and (c)
engage in acts, practices, and courses of business which would and did operate
as a fraud and deceit upon others, in connection with the purchase and sale of
said securities, in violation of Title 15, United States Code, Sections 78j(b) and
78ff(a), and Title 17, Code of Federal Regulations, Section 240.l0b-5.
Background
At all times relevant to this Indictment:
2. The United States Securities and Exchange Commission ("SEC") was an
independent agency of the United States charged with enforcing the federal
securities laws, which are designed to provide the investing public with full
disclosure of all material facts regarding matters involving the offer, purchase,
and sale of securities, among other things. These laws protect the investing
public in the purchase of stock that is publicly distributed by maintaining fair
and honest securities markets and eliminating manipulative practices that tend
to distort the fair and just price of stock. The SEC regulated, among other things,
the offers and sales of securities. For a company to offer or sell its securities to the
public, federal securities laws, specifically Section 5 of the Securities Act of 1933,
required that the company first file a registration statement with the SEC or that
the transaction be exempt from registration. The requirement of a registration
statement was designed, in part, to protect the general investing public by
requiring detailed disclosures about a company's actual operations and financial
condition.
2
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'
3. The Financial Industry Regulatory Authority, Inc. ("FINRA") was an
industry organization representing persons and companies involved in the
securities industry in the United States. It was a self-regulatory organization
responsible for the regulation of its industry, with oversight from the SEC.
FINRA licensed individuals and admitted firms to the industry, wrote rules to
govern their behavior, examined them for regulatory compliance, and was
sanctioned by the SEC to discipline registered representatives and member firms
that failed to comply with the federal securities laws and FINRA' s rules and
regulations.
4. Trillian was a proprietary multiprotocol instant messaging application
created by Cerulean Studios, LLC. Trillian allowed users to connect with
multiple instant messaging services, including Google Talk, Facebook
Messenger, AOL Instant Messenger, and Yahoo! Messenger. The advantage of
using Trillian is that a user does not need to be logged into separate applications
to chat across multiple platforms.
5. A call option for stocks was, in substance, a contract that gave the option's
owner the right, but not the obligation, to buy shares of the underlying stock at a
set price per share, known as the option's strike price, on or before a set future
date, known as the option's expiration date. Generally, the holder of a call option
benefited when the price of the underlying stock increases. Short-term call
options generally expire within a week.
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L 1
6. Trade The News, TradeXchange, Benzinga, RANsquawk, and T3 Live,
LLC are examples of "market subscription services." These subscription services
disseminated market-related rumors and news.
7. Defendant MILAN PATEL was a day trader who resided in the Northern
District of Georgia. Defendant PATEL had a Trillian account. The conspirators
referred to defendant PATEL as "the Pope."
8. Bart Ross resided in the Northern District of Georgia. Ross was previously
registered with FINRA as a registered broker and employed at T3 Trading
Group, LLC. Ross had a Trillian account.
9. Mark Melnick resided in New Jersey and was a T3 Live Senior Trading
Strategist and T3 Live contributor. Melnick has been a professional day trader
since approximately 1999. Melnick operated a video feed on the T3 Live platform
through which Melnick provided real-time stock and options trade ideas to his
subscribers during trading hours in a live, interactive trading room. Melnick had
a Trillian account.
10. Charles Parrino resided in New Jersey and Florida and was registered with
FINRA as a registered broker. Parrino was employed by T3 Trading from
approximately January 2011 until July 2019. Parrino had a Trillian account.
11. Anthony Salandra resided in Florida and was registered with FINRA as a
registered broker. Salandra was employed by Chimera Securities, an SEC-
registered broker-dealer, from approximately August 2014 until August 2019.
Salandra had been previously employed by T3 Trading, another SEC-registered
broker-dealer. Salandra had a Trillian account.
4
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l,
The Fraudulent Rumor Trading Scheme
12. Beginning no later than in or about October 2017 and continuing until in or
about January 2020, the defendant, MILAN PATEL, Ross, Melnick, Parrino,
Salandra, and others known and unknown to the Grand Jury executed a scheme
in which they traded securities, primarily short-term call options, in publicly
traded companies (e.g., Disney, Kellogg, and Yelp) based on materially false
rumors about those companies that the conspirators had generated and
disseminated. These materially false rumors were intended to drive up the price
of the securities (both the underlying stock and options).
13. During the relevant period, defendant PATEL executed at least 100 trades
consistent with the alleged securities fraud scheme, including executing the
trades alleged in this Indictment. In total, defendant PATEL earned at least $1
million in profits from executing trades based on materially false rumors that
were generated and disseminated by the conspirators.
Manner and Means of Trading Scheme
14. Parrino, Salandra, Ross and the other conspirators drafted and generated a
variety of false rumors about the publicly traded companies, such as fake rumors
that a company was involved in an acquisition or spinoff, or that a prominent
investor intended to make a sizeable investment in a company. The materially
false rumors would sometimes have to be revised and reformulated in response
to input from defendant PATEL.
15. The conspirators communicated in a variety of ways, including using
Trillian, Skype, telephone calls, and email. With respect to drafting and finalizing
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the materially false rumors, the conspirators communicated by exchanging
electronic messages on Trillian.
16. Defendant PATEL and Melnick would often discuss via Trillian chat
exchanges, over Skype, and during telephone conversations, whether a particular
false rumor would be successful. Melnick provided defendant PATEL with a
"technical evaluation" regarding the particular stock under discussion.
17. Once the rumor was formulated, defendant PATEL was responsible for
disseminating the rumor via Trillian to multiple accounts, which in turn would
result in the materially false rumor being disseminated via one or more
subscription services, including Trade The News, TradeXchange, and Benzinga,
and via Twitter accounts. Defendant PATEL made the ultimate determination
whether one of the materially false rumors developed by the conspirators would
be disseminated.
18. Before defendant PATEL disseminated the rumor, defendant PATEL and
the other conspirators would typically acquire a position in the publicly traded
company that was the subject of the materially false rumor. The conspirators
typically purchased short-term call options before (sometimes just minutes or
seconds before) defendant PATEL disseminated the rumor. The conspirators
often (but not always) purchased short-term call options because the price of
such options is more sensitive than the price of the underlying stock.
Accordingly, it was possible for the conspirators to make greater percentage
returns by trading short-term call options rather than the underlying stock.
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19. The conspirators profited from their scheme by selling the options (or
other securities) after they increased in price. Defendant PATEL and the other
conspirators typically began selling off their positions shortly after the rumor
was disseminated (after the price of the option or underlying stock had
increased).
20. After trading on the fraudulent rumors, the conspirators would sometimes
exchange Trillian messages discussing whether a given fraudulent rumor
worked, that is, whether the conspirators traded profitably on the rumor.
21. Melnick had an agreement with defendant PATEL under which he would
share a portion of his profits with defendant PATEL from the above-described
securities fraud scheme.
Examples of Trades on Materially Fraudulent Rumors
January 2018 International Paper trade
22. International Paper was one of the world's leading producers of fiber-
based packaging, pulp, and paper, headquartered in Memphis, Tennessee.
International Paper was publicly traded under the ticker symbol "IP" on the
New York Stock Exchange. International Paper's securities were registered with
the SEC pursuant to Section 12(b) of the Securities Exchange Act of 1934.
23. On or about January 18, 2018, at approximately 10:02 a.m., Parrino sent
defendant PATEL a Trillian chat message with the following materially false
rumor: "IP Hearing privately held Koch Industries Inc. is nearing a deal to buy
International Paper Co. (IP) for close to $72.50 per share. unconfirmed."
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24. On or about January 18, 2018, at approximately 11:21 a.m., defendant
PATEL sent two Trillian chat messages to Parrino stating "bought ip" and "ip
long." Parrino responded "k[.]"
25. On or about January 18, 2018, between approximately 11:19:58 a.m. and
11:20:31 a.m., defendant PATEL purchased short-term call options in
International Paper.
26. On or about January 18, 2018, at approximately 11:21:15 a.m., seconds after
sending the above messages to Parrino, defendant PATEL sent out the materially
false rumor about IP to multiple Trillian accounts stating," IP Hearing privately
held Koch Industries Inc. is nearing a deal to buy International Paper Co. for
close to $72.50 per share. unconfirmed."
27. On or about January 18, 2018, between approximately 11:23:10 a.m. and
11:46:23 a.m., defendant PATEL profitably sold off his position in International
Paper.
28. The next morning, on or about January 19, 2018, Parrino sent defendant
PATEL the following Trillian message: "fyi I traded ZERO options in IP yest.
Retarded. Flipped some stock and watched it go higher."
February 2018 Pacific Gas & Electric Company trade
29. Pacific Gas & Electric Company ("PG&E") was one of the largest combined
natural gas and electric energy companies in the United States. PG&E was a
leading subsidiary of PG&E Corporation, which publicly traded under the ticker
symbol "PCG" on the New York Stock Exchange. PG&E Corporation's securities
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were registered with the SEC pursuant to Section 12(b) of the Securities Exchange
Act of 1934.
30. On or about February 1, 2018, at approximately 10:06:59 a.m., Salandra
sent the following message via Trillian to Ross and Parrino: "PCG whats up[?]"
Ross responds to Salandra and Parrino: "working on it."
31. On or about February 1, 2018, at approximately 10:11:06 a.m., defendant
PATEL sent Parrino a message on Trillian that read: "needa homer." Parrino
responds "yup. Roku ea damn[.]"
32. On or about February 1, 2018, at approximately 10:25:02, Parrino sent a
draft of the materially false rumor about PG&E to Ross and Salandra via Trillian
that read:" A spokeswoman for the California Department of Forestry and Fire
Protection is stating that after thorough investigation it has determined that the
fires that decimated a Santa Rosa neighborhood and killed 21 people was caused
by electrical equipment owned, installed, and maintained by a third party
exonerating Pacific Gas and electric Co. (PCG) from all liability."
33. On or about February 1, 2018, at approximately 10:30:44 a.m., Ross sent
Salandra and Parrino a Trillian message that he "will let you know when I buy."
34. On or about February 1, 2018, at approximately 11:37:14 a.m., Ross sent
Salandra and Parrino a Trillian message that he "bought PCG." Parrino replied
to Ross and Salandra via Trillian, "gimme 5 mins." Parrino then sent a Trillian
message to defendant PATEL at approximately 11:37:40 a.m . stating, "pik up."
35. On or about February 1, 2018, at approximately 11:40:57 a.m., Parrino sent
defendant PATEL a Trillian message with the following materially false rumor
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about PG&E: "A spokeswoman for the California Department of Forestry and
Fire Protection is stating that after thorough investigation it has determined that
the fires that decimated a Santa Rosa neighborhood and killed 21 people was
caused by electrical equipment owned, installed, and maintained by a third party
exonerating Pacific Gas and electric Co. (PCG) from all liability." At
approximately 11:45:44 a.m., Parrino sent the same materially false rumor to Ross
and Salandra via Trillian.
36. On or about February 1, 2018, between approximately 11:41:16 a.m. and
11:41:59 a.m., defendant PATEL purchased PCG short call options. Between
approximately 11:36:16 a.m. and 11:49:04 a.m., Ross, Parrino, and Salandra also
purchased PCG securities.
37. On or about February 1, 2018, between approximately 11:48:37 a.m. and
11:48:59 a.m., defendant PATEL sent out the materially false rumor about PG&E
to multiple Trillian accounts reading: "PCG :Hearing chatter the California
Department of Forestry and Fire Protection is stating that after a thorough
investigation it has determined that the fires that decimated a Santa Rosa
neighborhood and killed 21 people was caused by electrical equipment owned,
installed, and maintained by a third party exonerating Pacific Gas and electric
Co. (PCG) from all liability. unconfirmed."
38. On or about February 1, 2018, between approximately 11:49:36 a.m. and
11:49:54 a.m., defendant PATEL profitably sold off his position in PG&E
Corporation.
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'-
39. On or about February 1, 2018, at approximately 11:49:26 a.m., defendant
PATEL sent Parrino a Trillian message that stated: "that was I." At
approximately 11:52:16 a.m., defendant PATEL received from a Trillian account
with the username "swat.options/' the following message: "BOOOOM."
Defendant PATEL responded: "god dman [sic]. Lol."
40. On or about February 1, 2018, between approximately 11:52:26 a.m. and
11:52:34 a.m., defendant PATEL received the following messages from a Trillian
account with the username "saulrosenberg": "that's a great one. there's the
homer you've been waiting on."
41. On or about February 1, 2018, at approximately 11:53 a.m., trading was
temporary halted in PG&E Corporation.
42. On or about February 1, 2018, between approximately 11:49:40 a.m. and
12:00:54 p.m., Ross, Parrino, and Salandra also profitably sold off their positions
in PG&E Corporation.
March 2018 Disney trade
43. The Walt Disney Company ("Disney") was one of the largest mass media
and entertainment conglomerates in the world. Disney publicly traded under the
ticker symbol "DIS" on the New York Stock Exchange. Disney's securities were
registered with the SEC pursuant to Section 12(b) of the Securities Exchange Act
of 1934.
44. On or about March 7, 2018, between approximately 11:30 a.m. and 11:40
a.m ., Ross sent Parrino a Trillian chat message with two similarly phrased
Disney-related materially false rumors: (1) "Walt Disney Co. has hired Goldman
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sachs [sic] to spin off ESPN and their theme parks. The deal will enchane [sic]
shareholder value, and according to one analyst could leave [sic] to an eventual
sale of the company. Price tags could fetch over $175 per share according to
analysts"; and (2) "Walt Disney Co. (DIS) has reportedly hired Goldman Sachs in
an effort to spin off their ESPN unit and their theme parks. According to one
analyst the break-up could exceed $175 per share, and an eventual sale of the
company." This rumor relating to Disney, namely, that Disney purportedly hired
Goldman Sachs to help spin off several assets, including ESPN and its theme
parks, was materially false.
45. On or about March 7, 2018, at approximately 11:54 a.m., Ross sent Parrino
a Trillian message advising him that he spoke with defendant PATEL by phone
and gave defendant PATEL the Disney-related rumor. Parrino then asked to
speak with Ross by telephone.
46. On or about March 8, 2018, at approximately 7:48 a.m., Ross sent Parrino
the following Trillian message: "send me disney story." In response, Parrino sent
Ross a third, slightly different version of the Disney-related rumor, which read:
"According to sources, Walt Disney Co. (DIS) has reportedly hired Goldman
Sachs to spin off their theme parks and ESPN. According to one analyst the
break-up value could exceed $175 per share and may lead to an eventual sale of
the company, unconfirmed." Ross replied to Parrino, "doesn't read great," to
which Parrino responded, "back to the drawing board."
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47. On or about March 8, 2018, between approximately 8:10 a.m. and 9:52 a.m .,
Ross and Parrino exchanged multiple messages via Trillian in which they revised
the false Disney rumor.
48. On or about March 8, 2018, during the time when Ross and Parrino were
exchanging messages, defendant PATEL sent Ross a Trillian message requesting
that Ross call defendant PATEL.
49. On or about March 8, 2018, at approximately 9:53:14 a.m., Ross sent
defendant PATEL a Trillian message with the Disney-related rumor, which read,
"Walt Disney Co. (DIS) has reported! [sic] Sachs to spin off their theme parks and
ESPN. According to one analyst the break-up value could exceed $155 per share
and may lead to an eventual sale of the company."
50. Between on or about March 6, 2018 and on or about March 7, 2018, Ross
purchased short-term call options in Disney.
51. On or about March 7, 2018, defendant PATEL purchased short-term call
options in Disney.
52. On or about March 7, 2018, Salandra and Parrino purchased short-term call
options and stock in Disney.
53. On or about March 8, 2018, at approximately 9:57 a.m., defendant PATEL
purchased additional short-term call options in Disney.
54. On or about March 8, 2018, between approximately 9:51:05 a.m. and
9:57:40 a.m., Melnick, Salandra, and Parrino purchased short-term call options
and other securities in Disney.
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55. On or about March 8, 2018, at approximately 9:57:32 a.m., defendant
PATEL sent out the materially false rumor about Disney to multiple Trillian
accounts, including Salandra. Defendant PATEL sent out the rumor stating, "DIS
Chatter hearing hired GS to spin off their theme parks and ESPN. According to
one analyst the break-up fee value could exceed $155 per share and may lead to
an eventual sale of the company, unconfirmed."
56. On or about March 8, 2018, at approximately 9:58:50 a.m., Benzinga Chat
(BenzingaCharlie) posted "DIS spinoff chatter."
57. On or about March 8, 2018, at approximately 10:04:21 a.m., RANsquawk
posted "RANsquawk sources note Disney (DIS) may be selling off ESPN and
Theme Park assets 'unconfirmed."'
58. On or about March 8, 2018, between approximately 9:58:30 a.m. and
10:29:01 a.m., defendant PATEL profitably sold off his position in Disney.
59. On or about March 8, 2018, Melnick, Parrino, Ross, and Salandra profitably
sold off their positions in Disney beginning at approximately 9:58:42 a.m. and
continuing until approximately 3:19 p.m.
April 2018 Ben Franklin trade
60. Franklin Resources Inc. ("Ben Franklin") was a global investment firm
referred to as Franklin Templeton. Ben Franklin was publicly traded under the
ticker symbol "BEN" on the New York Stock Exchange. Ben Franklin's securities
were registered with the SEC pursuant to Section 12(b) of the Securities Exchange
Act of 1934.
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61. On or about April 17, 2018, Ross and Parrino exchanged multiple Trillian
chat messages about a materially false rumor involving Ben Franklin. Ross and
Parrino exchanged slightly different formulations (or drafts) of the rumor that
BlackRock, Inc., a global investment firm based in New York, may make an offer
to acquire Ben Franklin.
62. On or about April 18, 2018, at approximately 9:27:43 a.m., Ross sent
Parrino via Trillian the following version of the materially false rumor about Ben
Franklin: "BlackRock (BLK) has offered to acquire Franklin Resources (BEN) ina
[sic] cash transaction valuing the fund at $55 per share." Parrino replied via
Trillian to Ross, acknowledging that he received the rumor.
63. On or about April 18, 2018, at approximately 10:15 a.m., Parrino sent the
materially false Ben Franklin rumor back to Ross via Trillian.
64. On or about April 18, 2018, at approximately 10:23:28 a.m., Salandra sent
the materially false rumor about Ben Franklin via Trillian to defendant PATEL.
65. On or about April 18, 2018, between approximately 10:05:56 a.m. and
10:08:35 a.m., Ross purchased short-term call options in Ben Franklin.
66. On or about April 18, 2018, between approximately 10:25:34 a.m. and
10:25:35 a.m ., defendant PATEL purchased short-term call options in Ben
Franklin.
67. On or about April 18, 2018, at approximately 10:26:10 a.m., Melnick
purchased short-term call options in Ben Franklin.
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'-
68. On or about April 18, 2018, between approximately 10:09:23 a.m. and
10:25:59 a.m., Salandra purchased short-term call options and stock in Ben
Franklin.
69. On or about April 18, 2018, between approximately 10:09:23 a.m. and
10:26:23 a.m., Parrino purchased short-term call options and stock in Ben
Franklin.
70. On or about April 18, 2018, at approximately 10:26:13 a.m., defendant
PATEL sent out the materially false rumor about Ben Franklin to multiple
Trillian accounts. Defendant PATEL sent out the rumor stating, "BlackRock
(BLK) has offered to acquire Franklin Resources (BEN) in a cash transaction
valuing the fund at $55 per share (unconfirmed)."
71. On or about April 18, 2018, at approximately 10:27:30 a.m., Benzinga Chat
(BenzingaCharlie) posted "BLK BEN chatter," and at approximately 10:29:12
a.m., RANsquawk posted, "Takeover talks for Franklin Resources (BEN);
Blackrock touted as a potential suitor for USD 55/shr; unconfirmed."
72. On or about April 18, 2018, between approximately 10:26:53 a.m. and
10:43:09 a.m., defendant PATEL profitably sold his position in Ben Franklin.
73. On or about April 18, 2018, beginning at approximately 10:26:42 a.m. and
continuing until about 2:18:36 p.m., Melnick, Parrino, Ross, and Salandra
profitably sold their positions in Ben Franklin.
June 2019 BlackBerry Trade
74. BlackBerry Limited ("BlackBerry") was a Canadian software company
specializing in cybersecurity. BlackBerry was publicly traded under the ticker
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symbol "BB" on the New York Stock Exchange. BlackBerry's securities were
registered with the SEC pursuant to Section 12(b) of the Securities Exchange Act
of 1934.
75. On or about June 10, 2019, defendant PATEL had the following exchange
via Trillian with username "joecttrde3":
a. At approximately 12:51:01 p.m., joecttrade3 sent: "That CrowdStrike
IPO now valued to come at approx $6B, vs the $1.SB BB paid for
Cylance. CrowdStrike does a little more revs than Cylance, but still,
both originated from Mcafee. was my email A[.]"
b. Defendant PATEL responded a few seconds later: "god damn. both
form [sic] mcaffe[.]"
c. joecttrade3 responded: "correct"
d. Defendant PATEL responded: "keep it low key. [I] think u onto
something big."
76. On or about June 10, 2019, defendant PATEL purchased shares and
options in BlackBerry.
77. On or about June 11, 2019, between approximately 9:24:41 a.m. and
10:02:07 a.m., defendant PATEL purchased additional short-term call options. In
addition, between approximately 9:03:30 a.m. and 10:05:54 a.m., Melnick,
Parrino, and Salandra also acquired positions in BlackBerry.
78. On or about June 11, 2019, at approximately 9:59:07 a.m., defendant
PATEL received a Trillian message from Parrino with the following materially
false rumor about BlackBerry: "BB Various news outlets are hearing strong
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reports that Elliott Management Corp. has accumulated a major stake in
BlackBerry Limited (BB). Sources also hear several other private equity firms
have expressed an interest in the buyout of the entire cybersecurity company for
$14 to $15 per share. unconfirmed."
79. On or about June 11, 2019, at approximately 10:02:51 a.m., defendant
PATEL sent this materially false rumor about BlackBerry via Trillian to multiple
accounts.
80. Beginning on or about June 11, 2019, at approximately 10:16:39 a.m., and
continuing until on or about June 12, 2019, defendant PATEL profitably closed
his position in BlackBerry. Similarly, beginning on or about June 11, 2019, at
approximately 10:16:03 a.m., and continuing until on or about June 12, 2019,
Melnick, Parrino, and Salandra likewise closed their positions in BlackBerry.
August 2019 Kellogg Trade
81. The Kellogg Company ("Kellogg") was an American multinational food
manufacturer headquartered in Battle Creek, Michigan. Kellogg was publicly
traded under the ticker symbol "K" on the New York Stock Exchange. Kellogg's
securities were registered with the SEC pursuant to Section 12(b) of the Securities
Exchange Act of 1934.
82. On or about August 15, 2019, between approximately 9:55:31 a.m. and
9:56:17 a.m., defendant PATEL purchased short-term call options in Kellogg.
Between approximately 9:47:58 a.m. and 9:57:35 a.m., Melnick and Parrino also
purchased short-term call options in Kellogg.
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83. On or about August 15, 2019, at approximately 9:56:59 a.m., defendant
PATEL received a Trillian message from Parrino with the following materially
false rumor about Kellogg: "Kellogg (K) Hearing Pershing Square will soon
unveil a very large stake in Kellogg Company (K). Sources hear activist Bill
Ackman is demanding an immediate spin-off of MorningStar Farms to unlock
shareholder value." Almost immediately after receiving this rumor, at
approximately 9:57:15 a.m., defendant PATEL sent this materially false rumor
via Trillian to multiple accounts.
84. On or about August 15, 2019, between approximately 9:58:14 a.m. and
10:05:31 a.m., defendant PATEL profitably closed his position in Kellogg.
Melnick and Parrino closed their positions in Kellogg between approximately
9:58:14 a.m. and 12:42:38 p.m.
85. On or about August 15, 2019, after sending out the materially false rumor
about Kellogg, defendant PATEL received and sent various messages about
Kellogg:
a. At approximately 9:58:24 a.m., defendant PATEL received the
following message from Trillian username "joecttrade3": "nice one."
At approximately 10:00:23 a.m., defendant PATEL responded to
"joecttrade3": "bang[.]" At approximately 10:00:28 a.m.,
"joecttrade3" responded: "sick." Defendant PATEL had earlier sent
the materially false rumor about Kellogg to joecttrade3.
b. At approximately 10:00:24 a.m., defendant PATEL received the
following message from Trillian username "darrnbsh": "nl."
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Defendant PATEL had earlier sent the materially false rumor about
Kellogg to darrnbsh.
c. At approximately 10:22:58 a.m. and 10:44:45 a.m., defendant PATEL
received, respectively, the following messages from Parrino: "last
hurrah K" and "K pop."
August 2019 Yelp Trade
86. Yelp Inc. ("Yelp") operated Yelp.com, which was a crowd-sourced local
business review and social networking site that allowed its users to submit
unsolicited reviews of products or services using a one- to five-star rating scale.
Yelp was publicly traded under the ticker symbol "YELP" on the New York
Stock Exchange. Yelp' s securities were registered with the SEC pursuant to
Section 12(b) of the Securities Exchange Act of 1934.
87. On or about August 27, 2019, beginning at approximately 9:57:46 a.m. and
continuing until approximately 10:06:26 a.m., defendant PATEL, Melnick, and
Parrino began to purchase short-call options and securities in Yelp.
88. On or about August 27, 2019, at approximately 10:06:01 a.m., defendant
PATEL received a Trillian message from Parrino with the following materially
false rumor about Yelp: "Sources circulating a Form 13D will soon be filed by a
major activist. Hearing a sizeable stake in Yelp, Inc. (YELP) has been made.
Sources are hearing the activist will seek an immediate sale of the company."
Almost immediately after receiving this rumor, at approximately 10:06:36 a.m.,
defendant PATEL sent this materially false rumor via Trillian to various
accounts.
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89. Defendant PATEL, Melnick, and Parrino began closing their positions in
Yelp shortly after the materially false rumor was disseminated, with each of
them beginning to close their positions no later than 10:07:39 a.m. Defendant
PATEL profitably closed his entire position at approximately 10:24 a.m.; Melnick
profitably closed his position at approximately 10:13 a.m.; and Parrino profitably
closed his position at approximately 11:33 a.m.
Overt Acts
90. In furtherance of the conspiracy and to accomplish its objects and purpose,
the defendant, MILAN PATEL, and his co-conspirators, committed and caused
to be committed, in the Northern District of Georgia and elsewhere, the
following overt acts, among others:
a. On or about October 8, 2017, defendant PATEL emailed Parrino:
"Anyway get trillian pro dint [sic] wait like all morons."
b. In or about January 2018, defendant PATEL and Melnick engaged in
a conversation over Skype in which they discussed whether trading on a
materially false rumor relating to International Paper would be successful.
Specifically, defendant PATEL asked Melnick for "technical analysis"
about IP in assessing whether trading on a materially false rumor would
"work."
c. On or about January 18, 2018, between approximately 11:19:58 a.m.
and 11:20:31 a.m., defendant PATEL purchased short-term call options in
International Paper.
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d. On or about January 18, 2018, at approximately 11:21:15 a.m.,
defendant PATEL sent a materially false rumor about IP to multiple
Trillian accounts stating," IP[.] Hearing privately held Koch Industries Inc.
is nearing a deal to buy International Paper Co. for close to $72.50 per
share. unconfirmed."
e. On or about January 18, 2018, between approximately 11:23:10 a.m.
and 11:46:23 a.m., defendant PATEL sold off his position in International
Paper.
f. On or about February 1, 2018, at approximately 10:08:25 a.m .,
defendant PATEL sent Parrino a message on Trillian that read: "needa
homer." Parrino responded, "yup. Roku ea damn[.]"
g. On or about February 1, 2018, between approximately 11:41:16 a.m.
and 11:41:59 a.m., defendant PATEL purchased PCG short-term call
options.
h. On or about February 1, 2018, between approximately 11:48:37 a.m.
and 11:48:59 a.m., defendant PATEL sent out a materially false rumor
about PG&E to multiple Trillian accounts stating: "PCG :Hearing chatter
the California Department of Forestry and Fire Protection is stating that
after a thorough investigation it has determined that the fires that
decimated a Santa Rosa neighborhood and killed 21 people was caused by
electrical equipment owned, installed, and maintained by a third party
exonerating Pacific Gas and electric Co. (PCG) from all liability.
unconfirmed."
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i. On or about February 1, 2018, between approximately 11:49:36 a.m.
and 11:49:54 a.m., defendant PATEL profitably sold off his position in
PG&E Corporation.
j. On or about March 7, 2018, at approximately 11:54 a.m., Ross sent
Parrino a Trillian message advising him that he spoke with defendant
PATEL by phone and gave defendant PATEL the Disney-related rumor.
Parrino then asked to speak with Ross by telephone.
k. On or about March 8, 2018, during the time when Ross and Parrino
were exchanging messages, defendant PATEL sent Ross a Trillian message
requesting that Ross call defendant PATEL.
I. On or about March 8, 2018, at approximately 9:53:14 a.m., Ross sent
defendant PATEL a Trillian message with a Disney-related rumor, which
read, "Walt Disney Co. (DIS) has reported! [sic] Sachs to spin off their
theme parks and ESPN. According to one analyst the break-up value could
exceed $155 per share and may lead to an eventual sale of the company."
m. On or about March 7, 2018, defendant PATEL purchased short-
term call options in Disney.
n. On or about March 8, 2018, at approximately 9:57 a.m., defendant
PATEL purchased short-term call options in Disney.
o. On or about March 8, 2018, at approximately 9:57:32 a.m., defendant
PATEL sent out the materially false rumor about Disney to multiple
Trillian accounts, including Salandra. Defendant PATEL sent out the
rumor stating, "DIS Chatter hearing hired GS to spin off their theme parks
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and ESPN. According to one analyst the break-up fee value could exceed
$155 per share and may lead to an eventual sale of the company,
unconfirmed."
p. On or about March 8, 2018, between approximately 9:58:30 a.m. and
10:29:01 a.m., defendant PATEL sold off his position in Disney.
q. On or about April 18, 2018, at approximately 10:23:28 a.m., Salandra
sent a materially false rumor about Ben Franklin to defendant PATEL.
r. On or about April 18, 2018, between approximately 10:25:34 a.m.
and 10:25:35 a.m., defendant PATEL purchased short-term call options in
Ben Franklin.
s. On or about April 18, 2018, at approximately 10:26:13 a.m.,
defendant PATEL sent out the materially false rumor about Ben Franklin
to multiple Trillian accounts. Defendant PATEL sent out the rumor stating,
"BlackRock (BLK) has offered to acquire Franklin Resources (BEN) in a
cash transaction valuing the fund at $55 per share (unconfirmed) ."
t. On or about April 18, 2018, between approximately 10:26:53 a.m.
and 10:43:09 a.m., defendant PATEL closed his position in Ben Franklin.
u. On or about June 10, 2019, defendant PATEL purchased shares and
options in BlackBerry.
v. On or about June 11, 2019, between approximately 9:24:41 a.m . and
10:0:07 a.m., defendant PATEL purchased additional short-term call
options in Blackberry.
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w.On or about June 11, 2019, at approximately 9:59:07 a.m., defendant
PATEL received a Trillian message from Parrino with the following
materially false rumor about BlackBerry: "BB Various news outlets are
hearing strong reports that Elliott Management Corp. has accumulated a
major stake in BlackBerry Limited (BB) . Sources also hear several other
private equity firms have expressed an interest in the buyout of the entire
cybersecurity company for $14 to $15 per share. unconfirmed."
x. On or about June 11, 2019, at approximately 10:02:51 a.m., defendant
PATEL sent this materially false rumor about BlackBerry via Trillian to
multiple accounts.
y. Beginning on or about June 11, 2019, at approximately 10:16:39 a.m.,
and continuing until on or about June 12, 2019, defendant PA TEL
profitably closed his position in BlackBerry.
z. On or about August 15, 2019, between approximately 9:55:31 a.m.
and 9:56:17 a.m., defendant PATEL purchased short-term call options in
Kellogg.
aa. On or about August 15, 2019, at approximately 9:56:59 a.m.,
defendant PATEL received a Trillian message from Parrino with the
following materially false rumor about Kellogg: "Kellogg (K) Hearing
Pershing Square will soon unveil a very large stake in Kellogg Company
(K). Sources hear activist Bill Ackman is demanding an immediate spin-off
of MorningStar Farms to unlock shareholder value." Almost immediately
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after receiving this rumor, at approximately 9:57:15 a.m., defendant
PATEL sent this materially false rumor via Trillian to multiple accounts.
bb. On or about August 15, 2019, between approximately 9:58:14 a.m.
and 10:05:31 a.m., defendant PATEL profitably closed his position in
Kellogg.
cc. On or about August 27, 2019, beginning at approximately 9:57:46
a.m. and continuing until approximately 10:06:26 a.m., defendant PATEL
began to purchase short-call options and securities in Yelp.
dd. On or about August 27, 2019, at approximately 10:06:01 a.m.,
defendant PATEL received a Trillian message from Parrino with the
following materially false rumor about Yelp: "Sources circulating a Form
13D will soon be filed by a major activist. Hearing a sizeable stake in Yelp,
Inc. (YELP) has been made. Sources are hearing the activist will seek an
immediate sale of the company." Almost immediately after receiving this
rumor, at approximately 10:06:36 a.m., defendant PATEL sent this
materially false rumor via Trillian to various accounts.
All in violation of Title 18, United States Code, Section 371.
Count Two
(15 U.S.C. §§ 78j(b) & 78ff(a) - Market Manipulation/International Paper)
91. The factual allegations contained in Paragraphs 2 through 28 of this
Indictment are re-alleged and incorporated as if fully set forth herein.
92. On or about January 18, 2018, in the Northern District of Georgia and
elsewhere, the defendant, MILAN PATEL, aided and abetted by others known
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and unknown to the Grand Jury, did knowingly and willfully, by the use of
means and instrumentalities of interstate commerce, the mails, and the facilities
of national securities exchanges, directly and indirectly, use and employ
manipulative and deceptive devices and contrivances in connection with the
purchase and sale of securities of International Paper, and did (a) employ a
device, scheme, and artifice to defraud; (b) make untrue statements of material
facts and omit to state material facts necessary in order to make the statements
made, in light of the circumstances under which they were made, not
misleading; and (c) engage in acts, practices, and courses of business which
would and did operate as a fraud and deceit upon others, in connection with the
purchase and sale of said securities.
All in violation of Title 15, United States Code, Section 78j(b) and
Section 78ff(a), Title 17, Code of Federal Regulations, Section 240.l0b-5, Section
240.l0bS-l, and Section 240.l0bS-2, and Title 18, United States Code, Section 2.
Count Three
(15 U.S.C. §§ 78j(b) & 78ff(a) - Market Manipulation/PG&E)
93. The factual allegations contained in Paragraphs 2 through 21 and 29
through 42 of this Indictment are re-alleged and incorporated as if fully set forth
herein.
94. On or about February 1, 2018, in the Northern District of Georgia and
elsewhere, the defendant, MILAN PATEL, aided and abetted by others known
and unknown to the Grand Jury, did knowingly and willfully, by the use of
means and instrumentalities of interstate cmnmerce, the mails, and the facilities
27
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of national securities exchanges, directly and indirectly, use and employ
manipulative and deceptive devices and contrivances in connection with the
purchase and sale of securities of Pacific Gas & Electric Company, and did (a)
employ a device, scheme, and artifice to defraud; (b) make untrue statements of
material facts and omit to state material facts necessary in order to make the
statements made, in light of the circumstances under which they were made, not
misleading; and (c) engage in acts, practices, and courses of business which
would and did operate as a fraud and deceit upon others, in connection with the
purchase and sale of said securities.
All in violation of Title 15, United States Code, Section 78j(b) and Section
78ff(a), Title 17, Code of Federal Regulations, Section 240.l0b-5, Section 240.10b5-
l, and Section 240.10b5-2, and Title 18, United States Code, Section 2.
Count Four
(15 U.S.C. §§ 78j(b) & 78ff(a) - Market Manipulation/Disney)
95. The factual allegations contained in Paragraphs 2 through 21 and 43
through 59 of this Indictment are re-alleged and incorporated as if fully set forth
herein.
96. From on or about March 7, 2018, to on or about March 8, 2018, in the
Northern District of Georgia and elsewhere, the defendant, MILAN PATEL,
aided and abetted by others known and unknown to the Grand Jury, did
knowingly and willfully, by the use of means and instrumentalities of interstate
commerce, the mails, and the facilities of national securities exchanges, directly
and indirectly, use and employ manipulative and deceptive devices and
28
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contrivances in connection with the purchase and sale of securities of Disney,
and did (a) employ a device, scheme, and artifice to defraud; (b) make untrue
statements of material facts and omit to state material facts necessary in order to
make the statements made, in light of the circumstances under which they were
made, not misleading; and (c) engage in acts, practices, and courses of business
which would and did operate as a fraud and deceit upon others, in connection
with the purchase and sale of said securities.
All in violation of Title 15, United States Code, Section 78j(b) and Section
78ff(a), Title 17, Code of Federal Regulations, Section 240.l0b-5, Section 240.l0bS-
1, and Section 240.l0bS-2, and Title 18, United States Code, Section 2.
Count Five
(15 U.S.C. §§ 78j(b) & 78ff(a) - Market Manipulation/Ben Franklin)
97. The factual allegations contained in Paragraphs 2 through 21 and 60
through 73 of this Indictment are re-alleged and incorporated as if fully set forth
herein.
98. On or about April 18, 2018, in the Northern District of Georgia and
elsewhere, the defendant, MILAN PATEL, aided and abetted by others known
and unknown to the Grand Jury, did knowingly and willfully, by the use of
means and instrumentalities of interstate commerce, the mails, and the facilities
of national securities exchanges, directly and indirectly, use and employ
manipulative and deceptive devices and contrivances in connection with the
purchase and sale of securities of Franklin Resources, Inc. (Ben Franklin), and did
(a) employ a device, scheme, and artifice to defraud; (b) make untrue statements
29
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of material facts and omit to state material facts necessary in order to make the
statements made, in light of the circumstances under which they were made, not
misleading; and (c) engage in acts, practices, and courses of business which
would and did operate as a fraud and deceit upon others, in connection with the
purchase and sale of said securities.
All in violation of Title 15, United States Code, Section 78j(b) and Section
78ff(a), Title 17, Code of Federal Regulations, Section 240.l0b-5, Section 240.10b5-
1, and Section 240.10b5-2, and Title 18, United States Code, Section 2.
Count Six
(15 U.S.C. §§ 78j(b) & 78ff(a) - Market Manipulation/BlackBerry)
99. The factual allegations contained in Paragraphs 2 through 21 and 74
through 80 of this Indictment are re-alleged and incorporated as if fully set forth
herein.
100. From on or about June 10, 2019, to on or about June 11, 2019, in the
Northern District of Georgia and elsewhere, the defendant, MILAN PATEL,
aided and abetted by others known and unknown to the Grand Jury, did
knowingly and willfully, by the use of means and instrumentalities of interstate
commerce, the mails, and the facilities of national securities exchanges, directly
and indirectly, use and employ manipulative and deceptive devices and
contrivances in connection with the purchase and sale of securities of Blackberry,
and did (a) employ a device, scheme, and artifice to defraud; (b) make untrue
statements of material facts and omit to state material facts necessary in order to
make the statements made, in light of the circumstances under which they were
30
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made, not misleading; and (c) engage in acts, practices, and courses of business
which would and did operate as a fraud and deceit upon others, in connection
with the purchase and sale of said securities.
All in violation of Title 15, United States Code, Section 78j(b) and Section
78ff(a), Title 17, Code of Federal Regulations, Section 240.l0b-5, Section 240.10b5-
l, and Section 240.10b5-2, and Title 18, United States Code, Section 2.
Count Seven
(15 U.S.C. §§ 78j(b) & 78ff(a) - Market Manipulation/Kellogg)
101. The factual allegations contained in Paragraphs 2 through 21 and 81
through 85 of this Indictment are re-alleged and incorporated as if fully set forth
herein.
102. On or about August 15, 2019, in the Northern District of Georgia and
elsewhere, the defendant, MILAN PATEL, aided and abetted by others known
and unknown to the Grand Jury, did knowingly and willfully, by the use of
means and instrumentalities of interstate commerce, the mails, and the facilities
of national securities exchanges, directly and indirectly, use and employ
manipulative and deceptive devices and contrivances in connection with the
purchase and sale of securities of Kellogg, and did (a) employ a device, scheme,
and artifice to defraud; (b) make untrue statements of material facts and omit to
state material facts necessary in order to make the statements made, in light of
the circumstances under which they were made, not misleading; and (c) engage
in acts, practices, and courses of business which would and did operate as a
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fraud and deceit upon others, in connection with the purchase and sale of said
securities.
All in violation of Title 15, United States Code, Section 78j(b) and Section
78ff(a), Title 17, Code of Federal Regulations, Section 240.l0b-5, Section 240.l0bS-
1, and Section 240.l0bS-2, and Title 18, United States Code, Section 2.
Count Eight
(15 U.S.C. §§ 78j(b) & 78ff(a) - Market Manipulation/Yelp)
103. The factual allegations contained in Paragraphs 2 through 21 and 86
through 89 of this Indictment are re-alleged and incorporated as if fully set forth
herein.
104. On or about August 27, 2019, in the Northern District of Georgia and
elsewhere, the defendant, MILAN PATEL, aided and abetted by others known
and unknown to the Grand Jury, did knowingly and willfully, by the us~ of
means and instrumentalities of interstate commerce, the mails, and the facilities
of national securities exchanges, directly and indirectly, use and employ
manipulative and deceptive devices and contrivances in connection with the
purchase and sale of securities of Yelp, and did (a) employ a device, scheme, and
artifice to defraud; (b) make untrue statements of material facts and omit to state
material facts necessary in order to make the statements made, in light of the
circumstances under which they were made, not misleading; and (c) engage in
acts, practices, and courses of business which would and did operate as a fraud
and deceit upon others, in connection with the purchase and sale of said
securities.
32
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.
All in violation of Title 15, United States Code, Section 78j(b) and Section
78ff(a), Title 17, Code of Federal Regulations, Section 240.l0b-5, Section 240.10b5-
1, and Section 240.10b5-2, and Title 18, United States Code, Section 2.
Count Nine
(18 U.S.C. § 1349 - Conspiracy to Commit Securities Fraud)
105. The factual allegations contained in Paragraphs 2 through 89 of this
Indictment are re-alleged and incorporated as if fully set forth herein.
106. Beginning no later than in or about October 2017 and continuing until
in or about January 2020, the exact dates being unknown, in the Northern District
of Georgia and elsewhere, the defendant, MILAN PATEL, Bart Ross, Mark
Melnick, Charles Parrino, Anthony Salandra, and others known and unknown to
the Grand Jury did knowingly and willfully combine, conspire, confederate,
agree, and have a tacit understanding with each other to commit the securities
fraud scheme alleged in Paragraphs 2 through 89 of this Indictment, that is, to
knowingly devise, intend to devise, and execute a scheme and artifice (a) to
defraud any person in connection with any security of an issuer with a class of
securities registered under Section 12 of the Securities and Exchange Act of 1934,
and (b) to obtain, by means of materially false and fraudulent pretenses,
representations, and promises, any money and property in connection with the
purchase and sale of any security of any issuer with a class of securities
registered under Section 12 of the Securities and Exchange Act of 1934, in
violation of Title 18, United States Code, Section 1348.
All in violation of Title 18, United States Code, Section 1349.
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•
CountTen
(18 U.S.C. § 1348 - Securities Fraud/International Paper)
107. The factual allegations contained in Paragraphs 2 through 28 of this
Indictment are re-alleged and incorporated as if fully set forth herein.
108. On or about January 18, 2018, in the Northern District of Georgia and
elsewhere, the defendant, MILAN PATEL, aided and abetted by others known
and unknown to the Grand Jury, did knowingly execute and attempt to execute
the scheme and artifice alleged above in Paragraphs 2 through 28: (a) to defraud
any person in connection with any security of International Paper, an issuer with
a class of securities registered under Section 12 of the Securities and Exchange
Act of 1934, and (b) to obtain, by means of materially false and fraudulent
pretenses, representations, and promises, any 1noney and property in connection
with the purchase and sale of any security of International Paper, an issuer with
a class of securities registered under Section 12 of the Securities and Exchange
Act of 1934.
All in violation of Title 18, United States Code, Section 1348 and Section 2.
Count Eleven
(18 U.S.C. § 1348 - Securities Fraud/PG&E)
109. The factual allegations contained in Paragraphs 2 through 21 and 29
through 42 of this Indictment are re-alleged and incorporated as if fully set forth
herein.
110. On or about February 1, 2018, in the Northern District of Georgia and
elsewhere, the defendant, MILAN PATEL, aided and abetted by others known
and unknown to the Grand fury, did knowingly execute and attempt to execute
34
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•
the scheme and artifice alleged above in Paragraphs 2 through 21 and 29 through
42: (a) to defraud any person in connection with any security of PG&E, an issuer
with a class of securities registered under Section 12 of the Securities and
Exchange Act of 1934, and (b) to obtain, by means of false and fraudulent
pretenses, representations, and promises, any money and property in connection
with the purchase and sale of any security of PG&E, an issuer with a class of
securities registered under Section 12 of the Securities and Exchange Act of 1934.
All in violation of Title 18, United States Code, Section 1348 and Section 2.
Count Twelve
(18 U.S.C. § 1348 - Securities Fraud/Disney)
111. The factual allegations contained in Paragraphs 2 through 21 and 43
through 59 of this Indictment are re-alleged and incorporated as if fully set forth
herein.
112. From on or about March 7, 2018, to on or about March 8, 2018, in the
Northern District of Georgia and elsewhere, the defendant, MILAN PATEL,
aided and abetted by others known and unknown to the Grand Jury, did
knowingly execute and attempt to execute the scheme and artifice alleged above
in Paragraphs 2 through 21 and 43 through 59: (a) to defraud any person in
connection with any security of Disney, an issuer with a class of securities
registered under Section 12 of the Securities and Exchange Act of 1934, and (b) to
obtain, by means of materially false and fraudulent pretenses, representations,
and promises, any money and property in connection with the purchase and sale
35
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•
of any security of Disney, an issuer with a class of securities registered under
Section 12 of the Securities and Exchange Act of 1934.
All in violation of Title 18, United States Code, Section 1348 and Section 2.
Count Thirteen
(18 U.S.C. § 1348 - Securities Fraud/Ben Franklin)
113. The factual allegations contained in Paragraphs 2 through 21 and 60
through 73 of this Indictment are re-alleged and incorporated as if fully set forth
herein.
114. On or about April 18, 2018, in the Northern District of Georgia and
elsewhere, the defendant, MILAN PATEL, aided and abetted by others known
and unknown to the Grand Jury, did knowingly execute and attempt to execute
the scheme and artifice alleged above in Paragraphs 2 through 21 and 60 through
73: (a) to defraud any person in connection with any security of Ben Franklin, an
issuer with a class of securities registered under Section 12 of the Securities and
Exchange Act of 1934, and (b) to obtain, by means of materially false and
fraudulent pretenses, representations, and promises, any money and property in
connection with the purchase and sale of any security of Ben Franklin, an issuer
with a class of securities registered under Section 12 of the Securities and
Exchange Act of 1934.
All in violation of Title 18, United States Code, Section 1348 and Section 2.
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•
Count Fourteen
(18 U.S.C. § 1348 - Securities FraudfBlackBerry)
115. The factual allegations contained in Paragraphs 2 through 21 and 74
through 80 of this Indictment are re-alleged and incorporated as if fully set forth
herein.
116. From on or about June 10, 2019, to on or about June 11, 2019, in the
Northern District of Georgia and elsewhere, the defendant, MILAN PATEL,
aided and abetted by others known and unknown to the Grand Jury, did
knowingly execute and attempt to execute the scheme and artifice alleged above
in Paragraphs 2 through 21 and 74 through 80: (a) to defraud any person in
connection with any security of BlackBerry, an issuer with a class of securities
registered under Section 12 of the Securities and Exchange Act of 1934, and (b) to
obtain, by means of materially false and fraudulent pretenses, representations,
and promises, any money and property in connection with the purchase and sale
of any security of BlackBerry, an issuer with a class of securities registered under
Section 12 of the Securities and Exchange Act of 1934.
All in violation of Title 18, United States Code, Section 1348 and Section 2.
Count Fifteen
(18 U.S.C. § 1348 - Securities Fraud/Kellogg)
117. The factual allegations contained in Paragraphs 2 through 21 and 81
through 85 of this Indictment are re-alleged and incorporated as if fully set forth
herein.
118. On or about August 15, 2019, in the Northern District of Georgia and
elsewhere, the defendant, MILAN PATEL, aided and abetted by others known
37
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l •
and unknown to the Grand Jury, did knowingly execute and attempt to execute
the scheme and artifice alleged above in Paragraphs 2 through 21 and 81 through
85: (a) to defraud any person in connection with any security of Kellogg, an
issuer with a class of securities registered under Section 12 of the Securities and
Exchange Act of 1934, and (b) to obtain, by means of materially false and
fraudulent pretenses, representations, and promises, any money and property in
connection with the purchase and sale of any security of Kellogg, an issuer with a
class of securities registered under Section 12 of the Securities and Exchange Act
of 1934.
All in violation of Title 18, United States Code, Section 1348 and Section 2.
Count Sixteen
(18 U.S.C. § 1348 - Securities FraudfY elp)
119. The factual allegations contained in Paragraphs 2 through 21 and 86
through 89 of this Indictment are re-alleged and incorporated as if fully set forth
herein.
120. On or about August 27, 2019, in the Northern District of Georgia and
elsewhere, the defendant, MILAN PATEL, aided and abetted by others known
and unknown to the Grand Jury, did knowingly execute and attempt to execute
the scheme and artifice alleged above in Paragraphs 2 through 21 and 86 through
89: (a) to defraud any person in connection with any security of Yelp, an issuer
with a class of securities registered under Section 12 of the Securities and
Exchange Act of 1934, and (b) to obtain, by means of materially false and
fraudulent pretenses, representations, and promises, any money and property in
38
Case 1:23-cr-00126-LMM-JSA Document 1 Filed 04/19/23 Page 39 of 40
connection with the purchase and sale of any security of Yelp, an issuer with a
class of securities registered under Section 12 of the Securities and Exchange Act
of 1934.
All in violation of Title 18, United States Code, Section 1348 and Section 2.
Forfeiture Provision
121. Upon conviction of the offenses alleged in Counts One through Sixteen
of this Indictment, the defendant, MILAN PATEL, shall forfeit to the United
States of America, pursuant to Title 18, United States Code, Section 981(a)(l)(C)
and Title 28, United States Code, Section 2461(c), any property, real or personal,
which constitutes or is derived from proceeds traceable to said violations,
including, but not limited to, the following:
(a) MONEY JUDGMENT: A sum of money in United States currency,
representing the amount of proceeds obtained as a result of Counts One
through Sixteen of the Indictment.
122. If, as a result of any act or omission of the defendant, any property subject
to forfeiture:
a. cannot be located upon the exercise of due diligence;
b. has been transferred or sold to, or deposited with, a third party;
c. has been placed beyond the jurisdiction of the Court;
d. has been substantially diminished in value; or
e. has been commingled with other property which cannot be divided
without undue complexity or difficulty,
39
Case 1:23-cr-00126-LMM-JSA Document 1 Filed 04/19/23 Page 40 of 40
.,,/, l J •
it is the intent of the United States, pursuant to Title 21, United States Code,
Section 853(p), as incorporated by Title 28, United States Code, Section 2461(c), to
seek forfeiture of any other property of the defendant up to the value of the
forfeitable property described above.
A BILL
~~~
FOREERSON/
--i\:tEV"i.r-t::!Te'~ L
Assistant United States ~ +~u,1
Geor ·
THOMAS J. KREPP
----
Assistant United States Attorney
Georgia Bar No. 346781
600 U.S. Courthouse
75 Ted Turner Drive SW
Atlanta, GA 30303
404-581-6000; Fax: 404-581-6181
40
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