U.S. Attorney’s Office Collects More Than $620k in Restitution from Defendant in Penny Stock Fraud Scheme

First Assistant U.S. Attorney Michelle M. Baeppler announced that the Financial Litigation Program (FLP) of the U.S. Attorney’s Office for the Northern District of Ohio collected full restitution in the amount of  $624,122.15 from a defendant convicted of participating in a securities fraud scheme that caused a $39 million loss to investors.

According to court records, a notice of judgment satisfaction was approved for Defendant Justin Esposito, of Thornwood, New York, on Saturday, August 6, 2022.  In 2016, Esposito and other codefendants were convicted of orchestrating a penny-stock fraud scheme that resulted in a $39 million loss to investors in the Northern District of Ohio and elsewhere.

As part of his role in the scheme, Esposito cold-called potential investors and sold stock in public companies that he knew were being manipulated.  Esposito was paid commission from coconspirators for these sales.  

In January 2017, Esposito was ordered to pay $624,122.15 in restitution to the defendants for his role in the scheme.

This case was investigated by the FBI.  The financial litigation was handled by Assistant U.S. Attorney Suzana K. Koch.  This case was criminally prosecuted by Assistant U.S. Attorney Brian M. McDonough.

The U.S. Attorney’s Office is responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims.  The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss.

While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims Fund, which distributes the funds collected to federal and state victim compensation and victim assistance programs.

Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.