2 Plead Guilty to Issuing Bogus MindArrow Stock

A professional gambler and a small-business woman pleaded guilty Monday to issuing $16 million worth of counterfeit stock in MindArrow Systems Inc., an Aliso Viejo software firm that helps companies advertise over the Internet.

U.S. District Judge David O. Carter accepted the pleas of Maseia “Matthew” Bardasian, 68, and Nikki Ann Daly, 43, Reno residents who are cooperating with an investigation of the fraud. The pair won’t be sentenced until after they finish cooperating with the government.

Under federal sentencing guidelines, Bardasian could receive four to six years in prison and Daly two or three years for mail fraud and money laundering. Assistant U.S. Atty. John Hueston said the investigation into whether others were involved could take up to six months.

Daly’s RTT Transfers Inc. kept records of MindArrow’s shareholders and stock trades. At Bardasian’s instruction, she issued 1.1 million unauthorized shares of MindArrow stock to companies and trusts controlled by Bardasian and herself, then altered the stock ledger to conceal the fraud, according to the account of the case filed with the plea agreement.

Their plea agreement states that Bardasian gave her $1 million of the nearly $16 million raised in the sale of the counterfeit shares. “Bardasian was the mastermind; there’s no doubt about it,” Hueston said.

Nasdaq suspended trading in MindArrow shares for three months after the fraud was disclosed in February. The stock reached a high of $51.25 in March 2000, was at $4.50 when trading was frozen and closed Monday at $1.17, down 18 cents a share.