Exec pleads guilty in voicemail stock scheme

WASHINGTON — A Georgia telemarketing executive pleaded guilty Tuesday to obstructing federal regulators’ probe of an alleged nationwide securities fraud scheme that used voicemail messages made to seem accidentally left on people’s answering machines to pique their interest in stocks.

Michael J. O’Grady, who was the president of Georgia-based Telephone Broadcast Co. LLC, entered the plea to one count of obstruction of justice in U.S. District Court in Washington.

He faces a likely prison sentence of 10 to 16 months and is cooperating in the investigation. Authorities say the scheme drove up the combined market value of six small company stocks by about $179 million in 26 days last summer.

Prosecutors said O’Grady altered, destroyed and concealed records and documents, and told a Telephone Broadcast employee to delete company computer files. In August, O’Grady and two stock promoters went to a Gulfport, Miss., casino where they gave him $10,000 out of a blue duffel bag, according to the Securities and Exchange Commission.

O’Grady himself profited from trading in three of the stocks, the SEC said.

In a related civil settlement with the SEC, whose investigation he admitted impeding, O’Grady, 38, agreed to pay a $25,000 fine and $50,786 in restitution plus interest. He did not admit or deny wrongdoing in the SEC agreement.

The SEC also filed charges against Telephone Broadcast and its affiliate, Telephony Leasing Corp. LLC, for allegedly broadcasting the “wrong number” voicemail messages touting the stocks. The messages were part of a scheme enabling stock promoters in Houston to sell some $4.5 million of one of the stocks through a brokerage firm in Tampa, the SEC said. The two companies controlled by O’Grady were not fined in the settlement but agreed to an injunction barring them from future violations of securities laws.