The SEC has revealed today allegations against California residents Kevin C. Dills and Joseph A. Padilla. The SEC charges describe a fraudulent operation that took place between February 2020 and August 2022. Padilla is accused of selling public shares in multiple small businesses without authorization. Dills may have been involved in Padilla’s operation by using shares from a company he controlled.
The SEC alleges that Padilla orchestrated a fraudulent scheme in order to make personal gains and gain compensation from individuals who hired him to manage their illegal share purchases. Padilla reportedly arranged to have these individuals conceal their identities through the sale of shares via offshore accounts using a variety of names. According to the SEC, Padilla used his own brokerage accounts and those of friends and family members in order to manipulate share prices and support his scheme. Padilla allegedly recruited a stock trader at a registered brokerage to help with the trading operations of the scheme. The SEC notes that these stock sales were often timed to coincide with news or promotional announcements intended to attract investors.
Dills, on the other hand, is alleged to be in control of Oncology Pharma, Inc., an operation that was involved with Padilla. Dills, according to the SEC, supplied Padilla shares of Oncology Pharma that were later sold to the public. Padilla allegedly then transferred around $20 million to Dills through a complex web of foreign accounts. Both are accused of selling Oncology Pharma stock while arranging press releases to make the shares more attractive to investors.
The SEC accuses Padilla of violating antifraud laws outlined in Securities Act of 1933, and Securities Exchange Act of 1935. Dills was also accused of aiding Padilla to commit antifraud crimes. Padilla, Dills are being sued by the SEC for a number of different reliefs. They include permanent injunctions as well as civil penalties, penny-stock bars, prejudgment interests, disgorgement, and more. Bright Star International, Inc., Life Sciences Journeys, Inc., Carlos Hernandez, Jamie Quick, Ashley Robinson, Arlene sandoval, are listed as relief defendants, all of whom are suspected to have received money from the alleged scheme. The SEC is seeking disgorgement of profits and prejudgment interests from these defendants.
The U.S. Attorney’s Office filed a criminal case against Padilla, Dills and the District of Massachusetts in March 2023.
The SEC is represented by Ryan Murphy, Michael Moran and Kathleen Shields of the Boston Regional Office, assisted by various agencies from both domestic and abroad. The SEC continues its investigation.