by Mike Caswell
Joshua Lankford, the former Texas stock broker charged in a $41.8-million pump-and-dump scheme that took advantage of hurricane Katrina, has pleaded guilty to one count of money laundering. He entered the plea in an appearance before a judge in Oklahoma on Monday, Dec. 10. He faces a maximum of 10 years in jail and a $250,000 fine. (All figures are in U.S. dollars.)
Prosecutors claim that Mr. Lankford and others, including former Canadian broker Dean Sheptycki, fraudulently touted three companies from 2004 to 2006. Among them were National Storm Management Inc., a pink sheets listing that billed itself as a storm reconstruction outfit. According to prosecutors, the men sent out misleading faxes and e-mails touting the stock in the wake of hurricane Katrina, the storm that devastated New Orleans in 2005. Mr. Lankford then helped dump millions of shares.
Mr. Lankford's guilty plea comes after the U.S. successfully had him extradited from Costa Rica, where he had fled prosecution. He left the U.S. despite having a family that included young children. While in Costa Rica, he assumed the identity of a local citizen and used other false names. Even after he was arrested in September, 2011, he continued to claim he was a citizen of Costa Rica, prosecutors said.