Man Sentenced to 37 Months in Prison for Role in Fraudulent Stock Scheme

February 10, 2010 - BOSTON, MA—STEVEN P. SABLE, a former resident of Charlestown, Massachusetts, currently of Huntington Beach, California, was sentenced today in federal district court in Boston, Massachusetts for his role in a multi-year fraudulent stock promotion scheme. United States Attorney Carmen M. Ortiz; Susan Dukes, Special Agent in Charge of the Internal Revenue Service Criminal Investigation - Boston Field Division; and Warren T. Bamford, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, announced today that SABLE, age 62, was sentenced today by the Honorable George A. O’Toole after pleading guilty to eight counts of mail fraud, three counts of securities fraud, and one count of engaging in a monetary transaction in property derived from mail and wire fraud.

In September 2009, SABLE pleaded guilty to an Indictment charging him with a fraudulent stock promotion scheme that ran from June 1999 through April 2002. SABLE took at least $800,000 from 16 investors who purchased “units” of an entity called “Diversified Options,” based on false representations Diversified Options and its business. SABLE’s pitch varied from investor to investor, but his basic scheme was to tell prospective investors that Diversified Options controlled very valuable electronic flow measuring technology (called a “flow sensor”), that a lucrative deal for the sale of Diversified Options and/or its technology was imminent, and that shares (or “units”) in Diversified Options were available for purchase prior to the close of the deal. Often, SABLE promised rapid and huge returns to the investors. SABLE’s various statements about Diversified Options were false and fraudulent. Although the flow sensor was a real device developed by a professor at the University of Cincinnati, it has not yet reached commercial application. Contrary to SABLE’s representations to investors, no deals for the sale of Diversified Options or the technology were imminent. SABLE simply misappropriated the investor funds, either depositing them into his personal bank account or transferring them to other accounts that he or his family members controlled. He used the funds to finance a lavish personal lifestyle.

The Honorable George A. O’Toole sentenced SABLE to 37 months' imprisonment, three years' supervised release, and a mandatory special assessment of $1,200. Judge O’Toole also ordered SABLE to make restitution of $825,500 to the victims of his offense, some of whom spoke at the sentencing hearing.

The case was investigated by the Internal Revenue Service Criminal Investigation and the Federal Bureau of Investigation. The U.S. Attorney would like to thank the Boston District Office of the Securities Exchange Commission. The case was prosecuted by First Assistant U.S. Attorney Jack W. Pirozzolo of Ortiz’s Office and Assistant U.S. Attorney Ryan DiSantis of Ortiz's Economic Crimes Unit.