CPA PAID WITH FRAUD PROCEEDS! Penny Stock Kingpin Caught!

SEC v. George John Drazenovic — U.S. Securities and Exchange Commission Litigation Release No. 26449, dated December 19, 2025.

A British Columbia-licensed accountant, George John Drazenovic, settled with the SEC for his role in two penny stock fraud schemes. He acted as a finder for mineral extraction rights, which were used as purported assets for shell companies involved in pump-and-dump operations. Drazenovic will pay over $600,000 in disgorgement, interest, and penalties, and faces a conduct-based injunction and a penny stock bar.

In Plain English

Imagine someone found some land that might have valuable minerals. They told people this land was super promising, making a fake company's stock look like a great deal. Then, they hyped up the stock to make its price go up, and sold their own shares for a big profit. This accountant helped find the land and connect the dots for these fake companies, and now he has to pay a penalty and is banned from certain stock activities.

Disclaimer: all facts are drawn from the SEC's own filings; the claims described are allegations unless and until a court rules or the parties settle, and some cases end in dismissal.

How the Alleged Scheme Worked

1. Acquire Fraudulent Mineral Rights George John Drazenovic, a CPA, acted as a finder for mineral extraction or exploration rights. He selected properties near known mineral deposits, facilitating their acquisition by penny stock issuers controlled by fraudulent rings. He also served as a liaison to conceal the rings' control from site operators.
2. Establish Shell Companies Drazenovic facilitated the acquisition of these mineral rights for at least ten different penny stock issuers. These issuers were secretly controlled and funded by fraudulent rings, such as the Bauer Ring and the Ferris Ring.
3. Conceal Lack of Genuine Investment Drazenovic allegedly disregarded that the rings had no intention of investing the necessary resources to discover or extract minerals beyond minimal levels. The purported mineral assets were central to the pump-and-dump frauds.
4. Orchestrate Promotional Campaigns The fraudulent rings orchestrated promotional campaigns touting each issuer's supposedly realistic prospects of near-term abundant mineral extraction. These campaigns were designed to artificially inflate the stock price and create buy-side demand.
5. Inflate Stock Prices The promotional campaigns successfully triggered rises in the stock prices and buy-side demand for the issuers' shares. This price inflation was a key component of the pump-and-dump strategy.
6. Sell Shares into Demand The fraudulent rings sold their stock into the market during the price surges triggered by the promotional campaigns. This allowed them to cash out their investments at artificially high valuations.
7. Pay Drazenovic with Proceeds The proceeds generated from the sale of inflated stock were used by the rings to pay Drazenovic for his services as a finder and facilitator of the mineral rights.

The Enforcement Action

On December 18, 2025, the SEC filed a settled action against George John Drazenovic, a British Columbia-licensed CPA, for allegedly furthering two penny stock pump-and-dump fraud schemes. Drazenovic consented to a judgment permanently enjoining him from violating securities laws, prohibiting him from inducing purchases of securities unless they meet certain market capitalization thresholds, permanently barring him from participating in penny stock offerings, and barring him from serving as an officer or director of a public company for three years. He was ordered to pay disgorgement of $331,595, prejudgment interest of $51,050, and a civil penalty of $236,451. In a related administrative proceeding, he consented to an order suspending him from practicing before the SEC as an accountant.

Named in this action: George John Drazenovic.

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