SEC Charges CEO of Penny Stock Company with Fraud

The Securities and Exchange Commission last week filed fraud charges against Andrew J. Kandalepas, CEO of Wellness Center USA, Inc., a Chicago-based company.  In its complaint, the SEC alleged that Kandalepas manipulated the company’s stock and made false statements in the company’s SEC filings and press releases.

Specifically, the SEC claims that Kandalepas misappropriated $450,000 in unauthorized withdrawals from the company and then covered his misconduct by causing the company to characterize the withdrawals as salary, prepayments, or loans in misleading Forms 10-K and 10-Q.  The SEC further claims that Kandalepas caused the company to issue materially false press releases announcing sales of medical devices by a Wellness subsidiary that did not occur.

The SEC also alleges that Kandalepas manipulated the market for Wellness stock by virtue of his secret trading through a friend’s securities brokerage account, from which he reaped in excess of $130,000 in profits.

The SEC’s complaint alleges violations of the anti-fraud provisions of the federal securities laws, inter alia, violations of Section 17(a) of the Securities Act of 1933 (Securities Act) and Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 thereunder.  By way of remedies, the SEC is seeking a permanent injunction, disgorgement of ill-gotten gains, including prejudgment interest, a civil penalty, an officer-and-director bar, and a penny stock bar.

David R. Chase, a former SEC prosecutor and now SEC defense lawyer, is the principal of the Law Firm of David R. Chase, a SEC defense law firm, located in Fort Lauderdale, Florida.  Mr. Chase, a SEC defense lawyer, represents those under investigation by the SEC throughout the nation utilizing his SEC defense experience and judgment for his clients’ benefit.  If you have been sued by the SEC, or are under investigation by the SEC, FINRA or a state securities regulator, call SEC lawyer David Chase now for a confidential consultation in order to protect your legal rights at (800) 760-0912 or

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