SAN DIEGO (AP) — Federal prosecutors in San Diego say a software CEO has pleaded guilty to a $2.5 million fraud using offshore boiler rooms to solicit investments.
U.S. Attorney Laura Duffy announced Friday that iTrackr Systems CEO John G. Rizzo has admitted defrauding investors over millions of shares of the Florida-based company.
According to the plea agreement, the company developed software to track inventories and availability of electronics.
Rizzo and co-conspirators solicited investments for the company's penny stock without disclosing that only 20 percent of the investments went to the companies and the rest was the boiler room's commission.
The 51-year-old from Boca Raton sold millions of shares through a shell company in the British Virgin Islands to avoid federal securities scrutiny.
Due for sentencing Oct. 28, Rizzo faces a maximum 20-year sentence.