Litigation Releases (Justin D. Smith and Joshua Constantin)

Justin D. Smith and Joshua Constantin

U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 26091 / August 30, 2024

Securities and Exchange Commission v. Justin D. Smith and Joshua Constantin

, No. 2:24-cv-06004 (E.D.N.Y. filed Aug. 27, 2024)

SEC Charges Former Healthcare Company Executives with Fraud

The Securities and Exchange Commission today charged Justin D. Smith and Joshua Constantin with defrauding investors of at least $2.7 million, making materially false and misleading statements in SEC filings, and aiding and abetting the making of such misstatements. The SEC previously charged Constantin with securities fraud in 2011 in connection with a separate investment scheme, for whichthe court found him liableon all claims.

According to the SEC's complaint, between at least November 2017 and February 2023, Constantin and Smith solicited investments in Healthcare Solutions Holdings, Inc., and its successor-in-interest, Healthcare Solutions Management Group, Inc., whose common stock was quoted on OTC Markets, by fabricating more than $75 million in assets, falsely reflecting those assets in offering documents, and forging and disseminating documents purporting to corroborate those assets, including photoshopped bank and client account statements. The complaint further alleges that Smith and Constantin misled Healthcare Solutions' auditors and falsified certain books and records, and that Constantin violated a penny stock bar previously imposed on him.

The SEC's complaint, filed in the U.S. District Court for the Eastern District of New York, charges Smith and Constantin with violating and/or aiding and abetting violations of the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. In addition, the complaint charges violations of the books-and-records and reporting provisions of the Exchange Act, including: with respect to both Constantin and Smith, violating Section 13(b)(5) and Rule 13b2-1 thereunder and aiding and abetting violations of Sections 13(b)(2)(A) and 15(d) and Rules 12b-20, 15d-1, 15d-11, and 15d-13 thereunder; with respect to Smith, violating Rules 13b2-2 and 15d-14; and with respect to Constantin, aiding and abetting violations of Rule 13b2-2. The complaint also charges Constantin with violating Section 15(b)(6)(B)(i) of the Exchange Act by violating the penny stock bar previously imposed on him. The SEC seeks permanent injunctive relief, disgorgement of ill-gotten gains with prejudgment interest, civil money penalties, officer-and-director bars, and conduct-based injunctions, as well as a penny stock bar against Smith.

Constantin, without admitting or denying the SEC's allegations, has consented to a bifurcated settlement, subject to court approval, that will permanently enjoin him from future violations of the charged provisions of the federal securities laws, impose a conduct-based injunction, and bar him from serving as an officer or director of any SEC-reporting company. Under the terms of the settlement, disgorgement, prejudgment interest, and civil penalties will be determined by the court upon motion by the SEC.

The SEC's investigation was conducted by Benjamin Mishkin, Eric Kirsch, Frank Milewski, Neil Hendelman, and Wendy Tepperman of the New York Regional Office and supervised by Tejal Shah. The litigation will be led by Sushila Rao Pentapati and supervised by Daniel Loss.