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Former broker ordered to pay nearly $500,000 to settle Lifekeepers International stock scam

WEST PALM BEACH — A former Coral Springs stockbroker has been ordered to pay nearly $500,000 to settle a securities fraud suit brought more than four years ago by the Securities and Exchange Commission.

Federal court Judge Daniel T.K. Hurley has ordered Brad M. Nirenberg to pay to the court $191,807.78 in illegal profit he earned from a “pump-and-dump” scheme involving the stock of Lifekeepers International, a West Palm Beach firm that once claimed to have a national network of medical-testing outlets.

Nirenberg also must pay pre-judgment interest of $86,661, plus a civil fine of $191,807.78.

The suit alleged that between November 1999 and February 2000, Nirenberg, former broker Jeffrey R. Senger and Lifekeepers president and CEO Norman Piatti lied to investors about the condition of the company in order to build up the share price of its stock.

Among other things, the company claimed it had a stake in a company that it valued between $80 million and $500 million. Lifekeepers actually bought the stake for $50. The trio also claimed Lifekeepers to be profitable, well managed and a leader in the health care industry. It was none of those, according to the SEC.

Stenger, the alleged mastermind of the Lifekeepers scheme, made the mistake of bribing FBI agents posing as corrupt mutual fund officials as part of Operation Bermuda Short. He was indicted on 28 counts of securities fraud and related charges and later pleaded guilty in federal court.

According to estimates, Lifekeepers took investors for $3 million.

Nirenberg in April agreed to a court order banning him from violating federal securities law or taking part in any penny stock offering. Nirenberg did not admit or deny any wrongdoing.

In another matter, Hurley partially granted judgment against Paul Johnson, a Canadian man who once ran a Deerfield company that claimed to be the next Federal Express. Hurley deferred imposing monetary penalties on Johnson, who already has been convicted of 14 counts of securities fraud. His ruling, however, does ban Johnson from acting as a director or officer of any public company.

Johnson was CEO of Link Express Delivery Solutions, a company that claimed to be competing with Federal Express and UPS in the package delivery business. According to the SEC, Link issued a series of bogus private stock sales, raising more than $15.5 million from as many as 400 investors.

That money was to be used to run the business, but instead Johnson spent $2.3 million to support a lavish lifestyle replete with bodyguards and a personal valet. He spent at least $3 million renovating a South Beach club. The SEC sued Johnson in December 2001.