SANDPOINT — A former certified public accountant in Sandpoint is being sued by the U.S. Securities & Exchange Commission for defrauding investors through a kickback scheme.
The SEC action against Brian C. Jensen comes as he awaits sentencing in a criminal case accusing him of securities fraud in connection with the scheme, records show.
The SEC filed suit against Jensen in U.S. District Court in Brooklyn on Sept. 22, according to federal court records.
The SEC complaint alleges that Jensen solicited more than 25 of his accounting clients and investment conference attendees to buy more than $2 million in private placements of unregistered stock of ForceField Energy Inc., an efficient lighting products manufacturer.
ForceField purported to be a worldwide distributor of LED light products, although prosecutors say its stock was worthless. The company’s former board chairman, Richard St. Julien, was accused of conspiring with others in 2012 to manipulate the price and trading volume of ForceField’s stock.
The scheme involved secretly using nominees to purchase and sell ForceField stock without disclosing it to investors, according to the U.S. Attorney’s Office for the eastern district of New York. Trading of Forcefield stock was orchestrated to create the misleading appearance of genuine trading volume and interest in the stock. Stock promoters were then used to push ForceField stock, but never disclosed that they were receiving secret payments to sell it.
Prosecutors said investors lost $131 million as a result of the scheme, according to a Reuters news report.
The SEC complaint alleges St. Julien paid Jensen kickbacks of approximately 10 percent of the value of the ForceField investments he flogged to investors, earning $127,000 in ill-gotten gains. Jensen is also accused of obtaining $43,000 from ForceField stock that he sold, the SEC complaint alleges.
The civil filing comes about a month before Jensen is to be sentenced in a criminal case arising from the ForceField schemes. The criminal case is filed under seal, according to U.S. District Court records.
However, a Bonner County man who lost $50,000 after acting on Jensen’s investment advice, received notice from U.S. Probation in New York that Jensen pleaded guilty to securities fraud in March and is scheduled to be sentenced in federal court in Brooklyn on Oct. 19.
Jensen incorporated Legacy Global Tax & Accounting in Sandpoint in 2007, according to Idaho Secretary of State records. He dissolved the professional association in June 2017 and simultaneously recast the company as a limited liability corporation, state records show. Jensen’s Idaho CPA license has lapsed, according to CPAverify, the online site the Idaho Board of Accountancy directs license verification inquiries to.
Four days after the SEC filed suit, Jensen entered a partial judgment in which he neither admits nor denies the allegations in the complaint. The judgment permanently enjoins him from violating the charged provisions of federal securities laws and permanently bars him from participating in penny stock offerings. A court will decide the amount of disgorgement or civil penalties at a later date, a SEC news release said.
A ForceField Energy investor relations official was sentenced to 36 months in prison in August for his role in the scheme, according to a U.S. Attorney’s Office news release. A former registered broker drew a 15-month prison term. St. Julien, a Canadian citizen, was arrested while attempting to board a plane from Fort Lauderdale, Fla., to Costa Rica in 2015, the office said. St. Julien remains jailed while awaiting sentencing and published media accounts indicate he is cooperating with investigators.
Efforts to reach Jensen on Wednesday were not successful.
Keith Kinnaird can be reached by email at firstname.lastname@example.org and follow him on Twitter @KeithDailyBee.