U.S. Attorney's Office
District of Massachusetts
(617) 748-3100
March 13, 2015

New York Consultant Sentenced in Securities Kickback Scheme

BOSTON—A business consultant who assisted public companies find financing was sentenced today in connection with a kickback scheme.

Barry Hawk, 46, of Woodmere, New York, was sentenced today by U.S. Senior District Court Judge Mark L. Wolf to 36 months of probation, the first six months to be served in home confinement, a fine of $20,000 and forfeiture of $12,150. In December 2014, Hawk pleaded guilty to one count of wire fraud.

Hawk was the Managing Director of Statis Equities LLC, a consulting business, as well as President and CEO of Arctic Enterprises, Inc., a Florida-based plastics products manufacturing business. Hawk recruited three of his clients – publicly-traded companies whose shares traded in the over-the-counter securities market – to participate in a scheme to pay secret kickbacks to an investment fund representative in exchange for having the investment fund buy stock in these two companies. The kickbacks were concealed through the use of sham consulting agreements and other fraudulent documents. In reality, however, and unbeknownst to Hawk or his clients, the purported investment fund representative was an undercover federal agent and the fund itself did not exist. Hawk also participated in the scheme by having his own company, Arctic Enterprises, agree to pay kickbacks in exchange for funding. In addition to getting funding for his company, Hawk personally received 10 percent of the kickback payments.

The case was part of a lengthy investigation focusing on preventing fraud in the microcap securities markets. Microcap companies are small publicly-traded companies whose stock often trades at pennies per share.

United States Attorney Carmen M. Ortiz and Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. U.S. Attorney Ortiz expressed appreciation for the significant assistance received from the U.S. Securities and Exchange Commission. The case was prosecuted by Assistant U.S. Attorney Mark J. Balthazard.

This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information about the task force visit: www.stopfraud.gov.

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