The Boiler Room Behind 18 Penny Stocks: SEC Closes Case Against Five in Alleged $58 Million Pump-and-Dump

Published Oct. 9, 2026. Case statuses are current as of that date.

The calls came from what sounded like established investment management firms. According to federal securities regulators, they were actually a call center in Medellín, Colombia, run under fake names, with fake websites and spoofed phone numbers, pushing thinly traded U.S. stocks on retail investors.

On Oct. 8, 2026, the U.S. Securities and Exchange Commission announced it had obtained final judgments against all five individual defendants in that case: Francis Biller, Raymond Dove, Chester Alvarez, Troy Gran-Brooks and Justin Plaizier. The SEC said the litigation "is now concluded" [1].

Status in brief: The SEC case is civil. Biller, Alvarez, Gran-Brooks and Plaizier consented to judgments in 2025; Dove's judgment was entered by default on Sept. 30, 2026. Separately, according to the SEC, federal prosecutors in Brooklyn criminally charged Biller, Alvarez, Gran-Brooks and Plaizier; Alvarez, Gran-Brooks and Plaizier have pleaded guilty and been sentenced, and Biller has pleaded guilty and is awaiting sentencing [1]. The SEC release does not mention criminal charges against Dove, and his civil judgment by default is not a criminal conviction.

How the alleged scheme worked

The SEC's complaint, filed March 14, 2022, alleged that from at least January 2016 through at least July 2018 the five defendants schemed to operate a call center, known as a boiler room, that used high-pressure sales tactics to sell the stocks of small U.S. public companies to U.S. investors [1]. According to the SEC:

1. Phony firms. The call centers were "set up as phony investment management firms, with fake names, websites, and phone numbers" [2].
2. False personas. Using those personas, the defendants allegedly orchestrated a pump-and-dump scheme and made false and misleading statements, including about their own roles in promoting the stocks and about the companies themselves [1][2].
3. Paid to promote. The SEC alleged the defendants were paid approximately $10 million for promoting thinly traded stocks "which they misled investors to believe had high prospects for success" [2].
4. Scale. The defendants promoted the stock of at least 18 issuers and generated more than $58 million in trading proceeds, according to the complaint [1].

When the case was filed, the director of the SEC's Boston Regional Office, Paul Levenson, said: "These scam artists went to great lengths – using bogus companies, aliases, and spoofing their phone numbers – to defraud and mislead investors into a pump-and-dump scheme" [2]. That statement was the SEC's characterization at the time of filing.

Investor.gov explains the basic mechanics: in a pump and dump, fraudsters "spread false or misleading information to create a buying frenzy that will 'pump' up the price of a stock and then 'dump' shares of the stock by selling their own shares at the inflated price." Once they stop hyping the stock, the price typically falls and investors lose money [3].

The defendants and their judgments

Ages and cities were not listed in the SEC releases. All figures below are from the SEC's Oct. 8, 2026, litigation release [1].

• Francis Biller: Final consent judgment entered Feb. 21, 2025. Enjoined from violating antifraud provisions (Securities Act Section 17(a); Exchange Act Section 10(b) and Rule 10b-5); permanent penny stock bar; ordered to pay $8,392,982 in disgorgement plus prejudgment interest. Criminal case: pleaded guilty, awaiting sentencing.
• Chester Alvarez: Final consent judgment entered Jan. 24, 2025. Same antifraud injunctions, plus an injunction under the market manipulation provision, Exchange Act Section 9(a)(2); penny stock bar; $131,347 in disgorgement plus prejudgment interest. Criminal case: pleaded guilty and sentenced.
• Troy Gran-Brooks: Final consent judgment entered Jan. 24, 2025. Antifraud injunctions; penny stock bar; $838,101 in disgorgement plus prejudgment interest. Criminal case: pleaded guilty and sentenced.
• Justin Plaizier: Final consent judgment entered Jan. 24, 2025. Antifraud injunctions; penny stock bar; $134,652 in disgorgement plus prejudgment interest. Criminal case: pleaded guilty and sentenced.
• Raymond Dove: Final judgment by default entered Sept. 30, 2026. Permanently enjoined from violating the antifraud provisions and barred from participating in any penny stock offering; ordered to pay $2,923,446 in disgorgement and prejudgment interest and a $1,655,157 civil penalty.

The court denied the SEC's motion for a default against relief defendant Shredderz International Corp., which the SEC described as an entity controlled by Dove, for lack of personal jurisdiction. The SEC had previously dismissed its claims against three other relief defendants [1]. Relief defendants are not accused of wrongdoing; they are named only to recover funds.

A note on the court: The SEC's 2026 release lists the case caption as "No. 22-civ-01406 (D. Mass.)," while the text of the same release and the 2022 announcement say the complaint was filed in the U.S. District Court for the Eastern District of New York [1][2]. We report the Eastern District of New York below.

Red flags of a penny stock boiler room

• An unsolicited call from a "firm" you never contacted, pitching a small company you've never heard of.
• Urgency and pressure: "buy before the announcement," "this will double by Friday."
• Claims of independence from someone who may be paid to promote the stock.
• Thinly traded stocks with sudden spikes in price and volume and little real company news.
• Caller ID that looks local or official. The SEC alleged the defendants spoofed phone numbers [2].

What to do

1. Hang up on cold-call stock pitches. Don't buy anything on the first call.
2. Check the salesperson and firm using the SEC's free search tools on Investor.gov and FINRA's BrokerCheck.
3. Research the company in the SEC's EDGAR database. Be skeptical of companies with few filings or no real operations.
4. Report it to the SEC at sec.gov/tcr. Keep the caller's name, firm, phone number and any emails or "research reports" they sent.

Case status (as of Oct. 9, 2026)

Defendant	Court	Status as of Oct. 9, 2026	Source
Francis Biller	SEC civil case, E.D.N.Y. (22-civ-01406); parallel E.D.N.Y. criminal case	SEC: final consent judgment Feb. 21, 2025. Criminal: pleaded guilty, awaiting sentencing	[1]
Chester Alvarez	Same	SEC: final consent judgment Jan. 24, 2025. Criminal: pleaded guilty, sentenced	[1]
Troy Gran-Brooks	Same	SEC: final consent judgment Jan. 24, 2025. Criminal: pleaded guilty, sentenced	[1]
Justin Plaizier	Same	SEC: final consent judgment Jan. 24, 2025. Criminal: pleaded guilty, sentenced	[1]
Raymond Dove	SEC civil case, E.D.N.Y. (22-civ-01406)	SEC: final judgment by default Sept. 30, 2026; no criminal case mentioned by SEC	[1]

Civil judgments are not criminal convictions. Statuses can change, including through appeals or sentencing.

Sources

1. U.S. Securities and Exchange Commission, "SEC Obtains Final Judgments as to Five Defendants in Alleged Microcap Fraud Scheme," Litigation Release No. 26670, Oct. 8, 2026. https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26670
2. U.S. Securities and Exchange Commission, "SEC Charges Call Center Operators in $58 Million Penny Stock Scheme," press release 2022-41, March 15, 2022. https://www.sec.gov/newsroom/press-releases/2022-41
3. Investor.gov (U.S. Securities and Exchange Commission), "Pump and Dump Schemes," accessed Oct. 9, 2026. https://www.investor.gov/introduction-investing/investing-basics/glossary/pump-and-dump-schemes

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