A Schaumburg man pleaded guilty to engaging in a form of market manipulation to artificially inflate his nutrition company’s stock price for personal gain.
Andrew J. Kandalepas, 67, entered the guilty plea to one count of securities fraud on Tuesday before U.S. District Judge Gary Feinerman, according to a statement from the U.S. Attorney’s Office for the Northern District of Illinois.
Kandelapas was the CEO, president and chairman of the board for Wellness Center USA Inc., based in northwest suburban Hoffman Estates, prosecutors said. It raised more than $19 million from investors through stock sales, of which Kandalepas had more than three million shares.
According to the plea agreement, between December 2012 and June 2015, Kandalepas bought and sold shares of the company to inflate its stock price. He completed several of the trades towards the end of regular trading hours — a type of market manipulation known as “marking the close,” prosecutors said.
In an instance cited in his plea agreement, Kandalepas used a brokerage account in the name of an acquaintance to buy 300 Wellness Center shares in the last five seconds of a trading day in May 2015. This raised its share price by 4% percent, netting Kandelapas $30,000, the attorney’s office said.
In total, he amassed at least $136,176 in trading profits for personal use, prosecutors said.
Securities fraud is punishable up to 20 years in prison. Kandalepas’ sentencing hearing is scheduled for Sept. 5.