In the 1989 film "National Lampoon's Christmas Vacation," Clark Griswold marvels one night at what he believes to be the "Christmas star," only to learn from his uncle that it's a light from the nearby sewage-treatment plant.
Yesterday, the chief executive officer of National Lampoon Inc. and the heads and associates of other companies found themselves figuratively knee-deep in sewage after federal authorities charged them with conspiracy and securities fraud for allegedly manipulating their companies' publicly traded stocks for profit.
Flanked by representatives from the FBI and the Securities and Exchange Commission, acting U.S. Attorney Laurie Magid said that the seven people charged had participated in a scheme to rig the system so that "only those on the inside [would] benefit."
The scheme created the "illusion" of market interest in a company by way of "corrupt" stock promoters who bought and held a company's stock in exchange for cash kickbacks upward of $68,000, according to news releases and court documents.
The idea was to inflate a stock's value artificially and increase the interest of prospective investors.
"But this was manipulated," Magid said. "[It would] leave the average investor holding the bag when the stock plummets down to the actual value."
Daniel Laikin, 46, of Los Angeles, head of National Lampoon Inc., an L.A. media company with rights to the National Lampoon properties, controlled more than 40 percent of the company's stock and stood to make $15 million from the scheme, Magid said.
Also charged were Dennis Barsky, 60, of Las Vegas, a National Lampoon consultant, and stock promoters Tim Dougherty, 29, of Webster, N.Y., and Eduardo Rodriguez, 49, of Livingston, N.J.
Rodriguez also faces charges for attempting similar schemes with two other companies - Advatech Corp., a West Palm Beach, Fla., biotech corporation, and Swedish Vegas Inc., a Delaware corporation in the business of "themed eateries," according to court documents.
Also indicted were Richard Margulies, 58, of Edison, N.J., chief executive of Advatech; and Alex Kanakaris, 52, of Newport Beach, Calif., and Richard Epstein, 60, of Parkland, Fla., both major investors in Swedish Vegas.
Authorities were able to build their case using a "cooperating witness" who posed as a corrupt stock promoter, according to Magid.
She said that her office had been able to establish the case because some of the "overt actions" happened in the Philadelphia area, including the mailing or wiring of funds.
Daniel M. Hawke, regional director for the SEC, said that trading on all three corporations had been suspended yesterday morning.