Former Charlestown Man Guilty in Fraudulent Stock Scheme

BOSTON, MA—A former resident of Charlestown, Massachusetts, currently of Huntington Beach, California, pled guilty today in federal district court in Boston, Massachusetts to multiple counts in an indictment charging him with a multi-year fraudulent stock promotion scheme.

Acting United States Attorney Michael K. Loucks, Susan Dukes, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation - Boston Field Office and Warren T. Bamford, Special Agent in Charge of the Federal Bureau of Investigation - Boston Field Office announced today that STEVEN P. SABLE, age 62, pled guilty today before United States District Judge George A. O’Toole to eight counts of mail fraud, three counts of securities fraud and one count of engaging in a monetary transaction in property derived from mail and wire fraud.

At the plea hearing, the prosecutor told the Court that from at least June 1999 through at least April 2002, SABLE engaged in a fraudulent stock promotion scheme in which he sold to at least 16 investors in excess of $800,000 of “units” of an entity called “Diversified Options” based on false and fraudulent statements about Diversified Options and its business. SABLE’s precise conduct varied from investor to investor, but his basic scheme was to tell prospective investors that Diversified Options controlled very valuable electronic flow measuring technology (called a “flow sensor”), that a lucrative deal for the sale of Diversified Options and/or its technology was imminent, and that shares (or “units”) in Diversified Options were available for purchase prior to the close of the deal. Often, SABLE promised rapid and huge returns to the investors. SABLE’s various statements about Diversified Options were false and fraudulent. Although the flow sensor was a real device, the flow sensor had not (and, to date, has not) reached commercial application. Contrary to SABLE’s representations to the investors, no deals for the sale of Diversified Options or the technology were imminent. SABLE simply pocketed the investor funds by depositing them into his personal bank account or by transferring themto accounts that he or his family members controlled. He then used the funds to finance a lavish personal lifestyle.

Sentencing has been set for December 15, 2009 at 2:00 p.m.

On each mail fraud count to which he pled guilty, SABLE faces up to five years' imprisonment to be followed by three years' supervised release and a fine of $250,000. On each securities fraud count to which he pled guilty, SABLE faces up to 10 years' imprisonment, to be followed by three years of supervised release and a $1,000,000 fine. On the monetary transaction count to which he pled guilty, SABLE faces up to 10 years' imprisonment, to be followed by three years of supervised release and a $250,000 fine.

The criminal case against SABLE was investigated by the Internal Revenue Service and the Federal Bureau of Investigation. The U.S. Attorney would also like to thank the Boston District Office of the Securities Exchange Commission. It is being prosecuted by Assistant U.S. Attorney Jack W. Pirozzolo of Loucks’ Economic Crimes Unit.