UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF FLORIDA

CASE NO.

18 U.S.C. 5 37118 U.S.C. 1 981

UNITED STATES OF AM ERICA

VS.

JEFFREY BERKOW ITZ.

Defendant.

INFORM ATION

The United States Attorney charges:

GENERAL ALLEGATIONS

At a11 times relevant to this Information:

1 . The Pink OTC M arkets, lnc. was an inter-dealer electronic quotation and trading

system in the over-the-counter securities market commonly referred to as the ''Pink Sheets.''

2. Face Up Entertainment Group (''FUEG'') was a Florida corporation whose

common stoek was publicly quoted on the Pink Sheets and whose common stock was registered

with the Securities and Exchange Commission (''SEC'') under section 12 of the Securities

Exchange Act of 1934. Therefore, FUEG was required to file periodic reports with the SEC

disclosing all material facts related to the operation of the company.

CONSPIRACY TO COM M IT SECURITIES FRAUD

(18 U.S.C. 1 371)

From in or around December 2012, through in or around Febnmry 2013, in M iami-Dade

County and Broward County, in the Southern District of Florida, and elsewhere, the defendant,

14-20342-CR-SCOLA/VALLE

May 15, 2014

TBCase 1:14-cr-20342-RNS Document 1 Entered on FLSD Docket 05/15/2014 Page 1 of 6

JEFFREY BERKOW ITZ,

did willfully, that is, with the intent to further the object of the conspiracy, and knowingly

combine, conspire, confederate and agree with L.B. and others known to the United States

Attomey to knowingly and with intent to defraud execute a scheme and artifice to defraud any

person in connection with any security of an issuer with a class of securities registered under

section 12 of the Securities Exchange Act of 1934 and that is required to tile reports under section

15(d) of the Securities Exehange Act of 1934, that is, shares of FUEG common stock, and to

obtain, by means of materially false and fraudulent pretenses, representations and promises,

money and property in connection with the purchase and sale of said securities, in violation of

Title 18, United States Code, Section 1348.

PURPOSE OF THE CONSPIM CY

3. lt was the purpose of the conspiracy for JEFFREY BERKOW ITZ and co-

conspirator L.B. to unlawfully enrich themselves by, among other things, engaging in the

fraudulent manipulation of FUEG'S stock by artificially intlating FUEG trading volume and stock

share price, through an improper payment to an artiticial buyer and the timing of the issuance of a

FUEG press release.

M ANNER AND M EANS OF THE CONSPIRACY

The manner and means by which JEFFREY BERKOW ITZ and co-conspirator L.B.

sought to accomplish the object and purpose of the conspiracy included, but was not limited to, the

following:

4. From in around Decem ber 2012, through in or around February 20l 3, in a series of

meetings, telephone calls and electronic mailings with a cooperating source (''CS''), JEFFREY

BERKOW ITZ and co-conspirator L.B. agreed to pay the CS $5,000 to act as an artiticial buyer

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and purchase FUEG common stock on the open market.

Through the artificial buyer's purchase, JEFFREY BERKOW ITZ and

co-conspirator L.B. sought to manipulate the market and give the investing public the false

impression that FUEG'S stock price was rising and that there was a public market for FUEG stock.

OVERT ACTS

ln furtherance of the conspiracy and to accomplish its object and purpose, at least one

co-conspirator committed, and caused to be committed, in the Southern District of Florida and

elsewhere, at least one of the following overt acts, among others:

1 . On or about February 5, 2013, in M iami-Dade County, in the Southern District of

Florida, during a telephone call between co-conspirator L.B. and the CS, co-conspirator L.B.

stated that he ''had the 5 ($5,0001'' and then informed the CS that FUEG would be issuing a press

release soon conceming ''beta testing with Facebook.''

2. On or about February 6, 20l 3, in Broward County, the Southern District of Florida,

the co-conspirators caused $5,000 to be deposited into the CS's Bank of America account for the

fraudulent buying scheme. After this deposit into the CS's bank account, co-conspirator L.B.

called the CS and instructed him to ''check your B of A account.'' On this same date, JEFFREY

BERKOW ITZ had a conversation with this CS, in which JEFFREY BERKOW ITZ informed

the CS that i'this thing (FUEG stock! could go for to forty cents tomorrow.'' JEFFREY

BERKOW ITZ additionally told the CS to i'go in early'' when completing the purchase of FUEG

stock.

On or about February 7, 2013, co-conspirator L.B. sent a text m essage to the CS

infonning him that the previously mentioned advanced FUEG news would be issued the following

mom ing.

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Case 1:14-cr-20342-RNS Document 1 Entered on FLSD Docket 05/15/2014 Page 3 of 6

4 .

behalf of the purported artificial buyer, purchased 35,000 shares of FUEG common stock on the

open market.

JEFFREY BERKOW ITZ and co-conspirator L.B. prepared and caused a FUEG

press release to be issued on February 8, 2013, which was designed and issued to give the investing

On or about February 8, 2013, a Federal Bureau of Investigation agent, acting on

public the false impression that the recent and positive market movement of FUEG stock was

induced by positive news about the company.

All in violation of Title 18, United States Code, Section 371.

FORFEITURE

(18 U.S.C. 1 981(a)(1)(C))

1.

reference for the pupose ofalleging criminal forfeiture to the United States of America of certain

property in which the defendant, JEFFREY BERKOW ITZ, has an interest.

The allegations in this Information are realleged and fully incoporated herein by

Upon conviction of a conspiracy to commit an offense involving fraud in the sale of

securities, as alleged in this lnfonnation, the defendant shall forfeit to tht United States of

America, pursuant to Title 18, United States Code, Section 981(a)(1)(C), any property, real or

personal, which constitutes, or is derived from, any proceeds traceable to such violation.

A1l pursuant to Title 1 8, United States Code, Section 981(a)(1)(C), as made applicable

by Title 28s United States Code: Section 2461(c), and the procedures set forth at Title 2 1, United

States Code 853. l N QW IFREDO A. FERRERUNITED STATES ATTORNEY

M lC AEL R. S -W IN7ASSISTA TATES ATTORNEY

4

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UNITED STATES DISTRICT COURTSOUTHERN DISTRIG OF FLORIDA

UNITED STATES OF AM ERICA

V$.

IEFFREY BERKOWITL

Defendant./

Court Division; (select one)

X Miami Key W estFTL W PB FTP

! do hereby certify that:

1. l have carefully considered the allegations of the indictment, the number of defendants, the number ofprobable witnesses and the Iegal complexities of the lndictment/lnformation attached hereto.

EASE NO.

CERTIFICATE OF TRIAL ATTORNEY*

Superseding Case lnformatlon:

New Defendantls)Number of New DefendantsTotal number of counts

Yes No

I am aware that the information supplied on this statement will be relied upon by the Judges of this Court insetting their calendars and scheduling criminal trials under the mandate of the Speedy Trial Act, Title 28

U.S.C. Section 3161.

Interpreter: (Yes or No) N0List language and/or dialect

This case will take Q days for the parties to try.

Please check appropriate category and type of offense Iisted below:

(check only one)

0 to 5 days6 to 10 days11 to 20 days21 to 60 days61 days and over

(Check only one)

iously filed in this District Court? (Yes or No) NO6. Has this case been prevIf yes:d e: Case NO.Ju g

(Attach copy of dispositive order)Iaint been filed in this matter? (Yes or No) NOHas a comp

If yes:Magistrate Case No.Related Miscellaneous numbers: - - -

Defendantts) in federal custody as ofDefendantls) in state custody as ofIe 20 from the Istrld ORu

X PettyM inorM isdem .Felony U -

Is this a potential death penalty case? (Yes or No) M N

Does this case originate from a matter pending in the Northern Region of the U.S. Attorney's Office prior to

October 14, 2003? Yes X No

ding in the Central Region of the U.S. Attorney's Office prior toDoes this case originate from a matter penSeptember 1, 20071 Yes X NO

!.

8.

*penalty Sheetls) attached

M ICHAEL R. ERWASSISTANT UNITED ATES AU ORNEY

Cout ID No. A5501230

REV 4/8/08

Case 1:14-cr-20342-RNS Document 1 Entered on FLSD Docket 05/15/2014 Page 5 of 6

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDA

PENALTY SHEET

Defendant's Name: JEFFREY BERKOW ITZ

Case No:

Count #: 1

Conspiracy to Commit Securities Fraud

Title 18. United States Codes Section 371

# M ax. Penalty: Five (5) years' imprisonment

Count #:

*M ax. Penalty:

Count #:

*M ax. Penalty:

Count #:

*M ax. Penalty:

WRefers only to possible term of incarceration, does not include possible fines, restitution,

special assessm ents, parole term s, or forfeitures that m ay be applicable.

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