Gregory A. White, United States Attorney for the Northern District of Ohio, today announced that an information was filed charging David A. Dadante with two counts of Securities Fraud.

Dadante, age 54, formerly of Gates Mills, resides in South Euclid, Ohio.

The information alleges that from in or about 1999, through in or about November 2005, while serving as the President and Founder of IPOF Fund, the defendant defrauded 100 different investors in the States of Ohio, New Jersey, Pennsylvania, Connecticut and Florida by misappropriating investor funds and disseminating false information and documents in an effort to conceal the fraud.

The information charges that the defendant accomplished this by misusing client money that was supposed to have been invested in Initial Public Offerings and blue chip stocks for the benefit of investors.

Dadante fraudulently represented and guaranteed that his trading strategies would generate extraordinary rates of return when, in fact, Dadante knew that the substantial portion of investor proceeds would not be used in that manner but rather used to perpetuate the illegal scheme, to pay previous investors in a manner consistent with a "Ponzi" scheme and to pay Dadante's personal expenses.

Dadante would falsely represent that the investors were achieving high returns on their investments, both orally and in writing, causing most investors to "roll-over" their existing investment and lull them into the belief that their investments were making money. He further represented that he had access to Initial Public Offerings from Goldman Sachs, Inc. in New York when, in fact, no such relationship existed.

To conceal and perpetuate the scheme to defraud the IPOF Fund clients, Dadante issued false and misleading financial statements, account statements and performance summary documents. In several instances, Dadante issued fictitious Goldman Sachs account statements. Dadante also prepared false and fictitious investor tax documents, known as K-1 Forms, for IPOF clients. These documents stated that the IPOF Fund was generating a profitable return when in truth, and in fact, the Fund lost money during the time it operated.

According to the information, from in or about 1999 to in or about November 2005, the defendant, David A. Dadante, charged and received directly from investors approximately $46,708,790.02 in investor monies. Dadante was not registered to sell securities by the U.S. Securities and Exchange Commission ("SEC"), the National Association of Securities Dealers ("NASD"), the State of Ohio or any other jurisdiction.

The information further charges that in a separate scheme, from in or about August 2002 through in or about November 2005, Dadante engaged in Securities Fraud by improperly manipulating the stock price of Innotrac Corp., a full-service order fulfillment and logistics provider located in Duluth, Georgia. Innotrac's stock trades on the NASDAQ. The information alleges that Dadante used a number of manipulative trading techniques to artificially inflate the price of Innotrac stock from a low of approximately $2.19 per share on or about October 15, 2002 to a high of approximately $12.00 per share on or about March 1, 2004. Dadante sought to conceal his ownership of Innotrac stock by not filing the required ownership forms with the United States Securities and Exchange Commission.

If convicted, the defendant's sentence will be determined by the Court after review of factors unique to this case, including the defendant's prior criminal record, if any, the defendant's role in the offense and the characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.

This case is being prosecuted by Assistant U.S. Attorney Justin J. Roberts following investigation by the Cleveland office of the Federal Bureau of Investigation and the United States Securities and Exchange Commission, Midwest Regional Office in Chicago.
An information is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government's burden to prove guilt beyond a reasonable doubt.