A California attorney was sentenced today in federal court in Boston in connection with the illegal sale of more than $1.3 million worth of unregistered shares of a Massachusetts-based health care company.
Daniel V. Martinez, 64, of Yuba City, Calif., was sentenced by US District Court Judge Patti B. Saris to one year of probation and 100 hours of community service. Martinez was also ordered to pay a fine of $7,500 and forfeit $110,999. In December 2022, Martinez pleaded guilty to one count of selling unregistered securities.
Between 2013 and 2016, Martinez served as a real estate attorney for Avtar Singh Dhillon, who was then chairman of the Massachusetts-based biotechnology company, Arch Therapeutics, Inc., a limited liability company created by Martinez and of which Martinez is the sole manager. At Dhillon’s direction, Martinez sold the shares in the open market without a valid exemption under the relevant securities laws and distributed the estimated $1.34 million in proceeds. Martinez distributed the proceeds to third parties for Dhillon’s benefit, taking a small portion directly for himself.
In December 2022, Dhillon pleaded guilty to one count of willful failure to disclose stock sales, one count of aiding and abetting the sale of unregistered securities, and one count of compensatory nondisclosure conspiracy. He is scheduled to be sentenced on May 23, 2024.
Acting United States Attorney Joshua S. Levy and Jodi Cohen, Special Agent in Charge of the Federal Bureau of Investigation, Boston Office, made the announcement. Valuable assistance was provided by the SEC’s headquarters and Boston regional office. Assistant US Attorney James R. Drrabick of the Securities, Financial, and Cyber Fraud Unit prosecuted the case.