Justice Department's indictment of Semion Mogilevich

communicating with market analysts to tout record profits in revenues from magnet sales,
and global operations, which were false and fraudulent.
H. SALES OF SECURITIES BY PRATECS/YBM
39. As a result of the material omissions set forth in paragraph 37(a) and (b)
above, the defendants caused Canadian regulators (ASE and ASC) on or about July 27, 1994, to
approve the sale of 4,000,000 shares of PRATECS at $0.10 (CDN) per share in an Initial Public
Offering. This sale of stock generated approximately $400,000 (CDN), which was used to fund
and promote the fraudulent operations of the company, including payments for consultant fees to
certain unindicted coconspirators.
40. As a result of the false, fraudulent, and deceptive practices set forth in
paragraph 35 and the misrepresentations and omissions set forth in paragraphs 36 and 37, the
defendants caused Canadian regulators to approve the sale of securities by the public company,
YBM, as follows:
(a) In or about October 1995, 7,075,000 Special Warrants, that is, securities
permitting the owners of the Warrants to convert them to shares of YBM common stock,
were sold to the public generating approximately $14.15 million (CDN) in proceeds,
which monies were used by the defendants to: (a) continue to fund the fraudulent
operations of the Network of YBM companies, including payments to defendant
BOGATIN, and others known and unknown to the grand jury; and (b) make payments to
FISHERMAN through a third party nominee account in Russia as well as payments to
individuals and companies associated with defendants MOGILEVICH, FISHERMAN and
BOGATIN.
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