Brockport, NY — A man is now awaiting sentencing after admitting to his role in a multi-million dollar investment scam.
Halford Johnson, 60, of Brockport, pled guilty to conspiracy to commit securities fraud. Prosecutors said between 2013 and 2018, Johnson and his codefendant, Darin Pastor, defrauded dozens of investors through their publicly traded company called Capstone Financial Group, formerly known as Creative App Solutions.
Pastor reportedly became the CEO of the company after buying over 3.5 million shares in September 2013, and appointed Johnson as chief financial officer.
Over the next four years or so, around 95 investors bought nearly $20 million worth of Capstone stock, after the pair of codefendants tricked them into believing Pastor had substantial personal wealth by creating a fake Wikipedia page for him claiming he had a net worth of hundreds of millions of dollars, according to prosecutors.
The pair also allegedly misled investors to believe their money would be used to fund multi-million dollar business deals that would increase the value of Capstone stock. Instead, Pastor was accused of using the investor money to fund a lavish lifestyle, paying for things including: a $1.5 million house, his wedding in the Caribbean, a house for his relative in Florida, and jewelry worth nearly $300,000.
In December 2016, Capstone informed investors of its intention to deregister from the stock market and become a private company, according to prosecutors. A few months later, Capstone reportedly offered to buy back shares of the company’s stock from investors and pay them at least four times the amount they initially paid.
Prosecutors said in order to trick investors into believing the new buy-back agreements would be fulfilled, the company made partial payments totaling around $6.7 million, but despite this, over $19.8 million of investor money was lost from 2013 to 2016.
Pastor was also charged in the reported scheme, but he died earlier this year before a verdict was reached, according to prosecutors.
Johnson is scheduled to be sentenced April 2, 2024, and faces up to five years in prison.