A former Parachute Regiment officer who pleaded guilty to masterminding a massive international “pump and dump” fraud will spend three years in a United States federal prison.
But Belfast man Roger Knox, a Campbell College alumni, faced up to 15 years for his involvement in a scheme prosecutors claim defrauded $164m (£135m) from thousands of mostly small investors.
Knox (53), known by the nickname Rocket, was first arrested five years ago after voluntarily travelling to the US from his home in the foothills of the Alps in France.
It has taken years following his arrest to unravel the complex web of finances surrounding his companies and to squeeze out as much money from what was left in various accounts.
Knox agreed earlier this year to forfeit $3.1m (£2.6m) in cash and securities with a potential worth of more than $6.5m (£5m) that were held in a bank account in Malta. He is also under investigation by the Securities and Exchange Commission, which polices the stock market.
US District Court Judge Nathaniel M. Gorton sentenced Knox to 36 months in prison, ordered him to forfeit $10m and restitution to be determined at a later date.
Knox pleaded guilty to involvement in what prosecutor, Eric Rosen, described as "probably the largest stock fraud of its kind in US history". Investors were promised huge returns on shares in companies that never traded or were otherwise worthless.
The "pump and dump" scam was made famous by the film The Wolf of Wall Street starring Leonardo Di Caprio.
Following sentencing last month, Jodi Cohen, special agent in charge of the Boston FBI, described Knox as “a critical participant in a massive global securities fraud scheme that generated more than $150 million in illegal proceeds."
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He added: “While today’s sentence cannot make up for the significant financial and emotional harm he and others inflicted upon their unwitting victims, it does send a message to those who may be looking to profit from similar schemes — think twice because the penalties you’ll face are steep."
A former officer in the Parachute Regiment, who attended Campbell College in the 1980s then studied economics at Stirling University, Knox ran the scam out of a small town in the foothills of the Swiss Alps.
He lived over the border in Chamonix, France, owned several properties in the area and, according to a local cafe owner, drove around in luxury cars, including a green Lotus Seven and a Porsche. He was a keen skier and mountain climber, even managing to secure a rescue licence while on his lengthy bail.
His downfall began after he and co-conspirators targeted US investors in a mailing campaign beginning in 2015. They offered shares in "microcap" companies in a move aimed at artificially inflating the price and increasing the trading volume.
Knox operated an asset management firm called Silverton, later named Wintercap, from the small town of Finhaut in Switzerland.
In a twist to the tale, it emerged one of Knox’s co-conspirators revealed the secrets of a high profile college bribery scheme in the US as he attempted to shorten his sentence on the fraud charges.
Under questioning in connection with the Knox scam, Morrie Tobin began talking about another scheme where the rich and famous, including it turned out actor Lori Loughlin, paid large sums of money to get their children into Ivy League and other top universities, often through bogus sports scholarships.
Tobin, after telling all to prosecutors about the cash for college entry scheme, then wore a wire in meetings with a sports coach from Yale, who later pleaded guilty to taking bribes. Tobin was sentenced to just one year in federal prison for his involvement in Knox's scheme.
