Crain’s NewYorkbusiness.com – By Aaron Elstein - A federal criminal indictment was issued Friday against the former leaders of Spongetech Delivery Systems, a publicly traded New York-based sponge-maker whose executives were charged by securities regulators in May with faking 99% of their company's sales.   Prosecutors charge the former Spongetech Chief Executive Michael Metter and former Chief Operating Officer Steven Moskowitz with five counts of fraud, conspiracy, obstructing justice, conspiracy to launder money, and perjury. Both men face up to five years in prison, a spokesman for the U.S. attorney's office in Brooklyn said, adding that an arraignment is scheduled for Tuesday. 

Mr. Metter—a former Wall Street stockbroker with a history of customer complaints—and Mr. Moskowitz were arrested in May. They were charged with conspiracy to commit fraud and obstructing justice and freed on $2 million bail each, but no indictment was filed at the time. The Securities and Exchange Commission also filed a civil lawsuit against the two men and some business associates. The feds say the two executives made “millions” in illegal profits by selling their stock at inflated prices as gullible investors bought their hype.

Link to Story: http://www.crainsnewyork.com/article/20100806/FREE/100809869 

Related Link: http://dictionary.reference.com/browse/sponge