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SEC target Wheeler loses motion for new sentence

2015-01-20 12:13 ET - Street Wire

Also Street Wire (U-*SEC) U S Securities and Exchange Commission
Also Street Wire (U-CNEX) Cannon Exploration Inc
Also Street Wire (U-IMGR) Infinity Medical Group Inc

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by Mike Caswell

Jailed New York stock tout Christopher Wheeler has lost his motion for a reduced sentence on tax charges, with the judge finding that there was nothing wrong with the modest 10-month term that he received. Mr. Wheeler had complained he should have received a non-custodial sentence (lawyerly speak for no jail) because of mental health issues and other problems. He said his former lawyer did not properly present those issues at sentencing.

The judge, however, has found that there was nothing wrong with Mr. Wheeler's sentence, and says it could have been far more severe. Mr. Wheeler had failed to file taxes for three years, during which he had income close to $12-million. (All figures are in U.S. dollars.) Moreover, his reason for not filing his taxes may have been to prevent the discovery of a "significant fraud" he was running, the judge's order states.

The "significant fraud" that the judge mentions stems from a civil suit that the U.S. Securities and Exchange Commission filed against Mr. Wheeler in 2011. The regulator claimed that he made $2.6-million in a pump-and-dump of four stocks. Most of the money came from the promotions of two Canadian pink sheets listings, Cannon Exploration Inc. and Infinity Medical Group Inc. The SEC said he touted the stocks through his website, OTCStockExchange.com, without disclosing that he was selling large volumes of stock.

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