The vice president of a company authorities say defrauded investors by artificially inflating stock in a proposed nuclear power plant in Payette County has been sentenced to prison.
Jennifer R. Ransom, 41, of Meridian, was sentenced Jan. 7 in U.S. District Court to 30 months in prison followed by three years of supervised release — the first six months of which is home confinement — for the crime of securities fraud, according to a news release from U.S. Attorney Wendy J. Olson.
Senior United States District Judge Edward J. Lodge also ordered Ransom to forfeit $580,780 and pay $116,138 in restitution to victim investors.
Ransom pleaded guilty to one count of securities fraud April 21.
According to the plea agreement, Ransom was the senior vice president of Administration of Alternate Energy Holdings Inc. AEHI was a development stage company headquartered in Eagle that planned to construct and operate a nuclear power plant in Payette County.
Ransom joined AEHI in late 2007, according to the plea agreement. Prior to joining AEHI, Ransom took and passed the Series 63 examination, one of the tests required to become a licensed securities agent. Therefore, she knew it was unlawful to engage in conduct that was designed to defraud or deceive investors by artificially controlling or fraudulently affecting the price of securities, according to the news release.
Notwithstanding, she agreed with her co-defendant, Donald L. Gillispie, the former president and CEO of AEHI, and other so-called nominees, to a scheme to defraud or deceive AEHI investors.
The scheme involved Gillispie and Ransom recruiting nominees to purchase AEHI stock on the market for the express purpose of artificially inflating the stock’s market price. Ransom personally helped recruit one of the nominees, according to the news release.
Without investors’ knowledge, Gillispie and Ransom provided
AEHI funds, obtained almost exclusively from investors, to two of the nominees to fund their market purchases of AEHI stock.
According to the plea agreement, investors who purchased AEHI stock directly from AEHI, through private placement memoranda were offered a price discounted from the market price that nominees were attempting to inflate. However, those investors could only purchase restricted AEHI stock, which they could not sell for six months to one year.
From Sept. 9 through Sept. 11 2009, Ransom helped a nominee purchase AEHI stock on the market. The purpose of these purchases was to artificially increase the market price of AEHI stock, which was trading above the private placement memoranda price.
During the next two months, private investors bought approximately $516,885 worth of AEHI restricted stock at the lower private placement memoranda price.
According to the plea agreement, Ransom received shares of AEHI stock as executive compensation. From June 2010 through September 2010, a period during which attempts were being made to artificially inflate the market price of AEHI stock, Ransom sold approximately 1 million of her shares and received approximately $675,326 in return, of which approximately $580,780 was the proceeds of securities fraud, according to the news release.
“This sentence sends the clear message that those who take actions to intentionally mislead stock purchasers for their own personal gain will be held accountable,” Olson said in the news release. “Our securities markets require, and investor decisions rely on, fair dealing, not deception.
“Ms. Ransom’s intentional decision to disregard her obligations as a corporate vice president warrants her prosecution and punishment in this case.”
Last May, Ransom’s co-defendant, Gillispie, failed to appear for two scheduled arraignment hearings. He remains a fugitive and is being pursued by the U.S. Marshals Service.
The case was investigated by the Internal Revenue Service’s Criminal Investigation division and the Federal Bureau of Investigation.