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New York man gets prison for stock offering scheme

NEW YORK, Nov 19 (Reuters) - The former top officer of a bogus car building kit business was sentenced on Tuesday to 37 months in prison for scheming to cheat investors out of about $1.8 million in connection with a fraudulent private placement stock offering.

James Wyss, 57, of Amityville, New York, had pleaded guilty in April to his role in the scheme. Wyss had been chief executive officer of an entity called Sabre Holdings Inc., which was not associated with the travel reservation company with the same name.

Samir Maalouf, 31, of Howell, New Jersey, who acted as a middleman in recruiting salespeople to sell Sabre stock, pleaded guilty in March and was sentenced to 18 months in prison.

According to the charges and the guilty pleas, Maalouf and others introduced Wyss to a group of salespeople working out of a classic "boiler room" in Staten Island, New York in the late 1990s.

Wyss and Maalouf recruited the salespeople to sell Sabre stock to the public and then cheated U.S. investors out of about $1.8 million in connection with that unregistered private placement offering.

The two falsely represented that Sabre was in the business of building and selling certain sports cars and car-building kits and that large automotive companies had signed contracts with Sabre to purchase a large portion of the company for millions of dollars.

Wyss and his co-conspirators also falsely represented that Sabre was on the verge of completing an initial public offering of its shares, promising immediate returns to investors.

Instead, Wyss used hundreds of thousands of dollars of investors' money for himself and to pay secret commissions of up to 55 percent to those operating the boiler room.