BAR HARBOR, Maine — The owner and operator of a local taxi tour transportation company has been extradited to New York where he pleaded innocent to charges that he participated in a scheme to defraud stock investors of $290 million.
Joseph Dervali, 54, pleaded not guilty on Sept. 22 in state supreme court in Manhattan to eight counts of scheming to defraud and four counts of violating the Martin Act, a spokeswoman in the New York County District Attorney’s Office said Thursday. The Martin Act is a broad state law that gives New York prosecutors the authority to file civil or criminal charges against anyone who is suspected of misrepresenting or omitting material facts when it comes to securities trading, according to the financial firm bloombergview.com.
He is next scheduled to appear in court on Oct. 1, the spokeswoman said.
Dervali, of Bar Harbor and Pembroke Pines, Florida, owns and operates Cadillac Joe’s Island Transportation LLC in Bar Harbor, which provides taxi and tour services in the Mount Desert Island area. At the request of New York City police, he was arrested Sept. 15 in Bar Harbor after local officers found him while he was driving his cab around town.
Dervali is one of eight people who were indicted on Sept. 11 in New York City on charges that they duped thousands of investors into purchasing $290 million worth of penny stocks in “pump and dump” schemes, according to a Reuters report. None of the other seven defendants have any known connections to Maine.
People involved in the alleged scheme blasted emails “pumping” the stocks to thousands of potential investors, Manhattan District Attorney Cyrus Vance Jr. has said. Others acquired public shell companies, merged new private companies into them and issued shares to themselves and associates in advance of the promotional push, prosecutors said.
Once the stock’s price was artificially inflated, the schemers “dumped” the stock, leaving public investors with shares that were pretty much worthless, prosecutors said.
Companies involved in the alleged scheme include Lyric Jeans Inc., Smart Holdings Inc., Hydrogenetics Inc., Xynergy Holdings Inc., Blast Applications Inc. and Blue Gem Enterprise Inc., Reuters has reported.
