A La Jolla couple have been indicted by a federal grand jury in San Diego on charges that they engaged in a years-long $100 million securities fraud and money laundering scheme.
The 24-count indictment, announced Jan. 21 by the U.S. attorney’s office for the Southern District of California, alleges that Brett Rosen, 45, and Deborah Rosen, 44, ran a market manipulation scheme since 2020 that involved financing, promoting and selling the stock of six publicly traded companies through their joint investment business, RB Capital Partners Inc. The companies were Optec International Inc., Sunshine Biopharma Inc., BlockQuarry Corp., Solar Integrated Roofing Corp., Cyberlux Corp. and Ilustrato Pictures International Inc.
The Rosens made initial appearances Jan. 21 in federal court in San Diego and pleaded not guilty to the charges, which include conspiracy, securities fraud and money laundering. If convicted, the couple potentially could face decades in prison and millions of dollars in fines.
A defense attorney whom Brett Rosen told the judge he planned to hire did not immediately respond to a request for comment. It was unclear whether Deborah Rosen had her own attorney.
In addition, the Rosens are being sued by the U.S. Securities and Exchange Commission in connection with Solar Integrated Roofing.
The suit also names the company’s former chief executive, David Massey, as a defendant and accuses the Rosens and RB Capital Partners of using social media and news releases “to promote the stock of a struggling public company … while simultaneously making massive, undisclosed sales of their own … stock at enormous profits.”
The federal indictment contends the Rosens’ promotion of the companies provided false and misleading information to investors, potential investors and the market about their financing of and stock positions in the companies.
According to prosecutors, the information was designed to encourage the public to invest in the companies and boost the value of their stock while the Rosens secretly dumped their own stock — which they acquired at steep discounts — to make millions of dollars. They then used the profits to fund an extravagant lifestyle, according to the indictment and court documents, including the purchase of a multimillion-dollar home in La Jolla Shores.
According to Zillow, the 5,000-square-foot home, which features a tennis court and a sweeping ocean view, was purchased in 2021 for $7.1 million and now is worth nearly $10 million.
The U.S. attorney’s office said the SEC and the Criminal Prosecution Assistance Group of the Financial Industry Regulatory Authority assisted in the case, which was investigated by the FBI. ♦