Chapman

I. FACTUAL AND PROCEDURAL BACKGROUND

On August 8, 2003, a grand jury in the District of Nevada returned a sixty-four-count indictment charging that Defen- dants, along with Shawn Hackman and James Farrell (who both pled guilty before trial), concocted a complex securities trading scheme known as a “box job,” where a small number 4942 UNITED STATES v. CHAPMAN of individuals secretly control a corporation’s shares and manipulate the stock price through strawmen officers, direc- tors, and shareholders.1 In this box job, Defendants allegedly created multiple shell corporations, back-dated corporate records to make their activities appear lawful, and named dummy directors and officers who had no actual control over the corporations and in some cases did not even know of their existence. According to the government, Defendants duped the National Association of Securities Dealers (“NASD”) and the Securities and Exchange Commission (“SEC”) into approving their corporations for listing on the Over-the- Counter Bulletin Board (“OTCBB”) stock exchange. OTCBB listing is a valuable asset, and these newly approved shell cor- porations could be merged with third-party business…