Federal prosecutors say a Baton Rouge businessman and three others conspired to illegally convert shares of a penny stock into a profit of hundreds of thousands of dollars.

Internal Revenue Service officials on Monday released an indictment filed last month against David Loflin of Baton Rouge, Heriberto Cruz of Chino Hills, California, and Benjamin Bunker of Las Vegas. All three are accused of several charges, including conspiracy, securities fraud, wire fraud and money laundering.

An Arizona securities broker, listed in court documents by the initials J.K., was identified as an unindicted co-conspirator.

In an email, Loflin directed a request for comments to his attorney, Phil Noland of Phoenix. Noland declined to comment on the charges.

According to the indictment, Loflin, Cruz and Bunker turned the debt of Greenway Design Group Inc. into nearly 2 billion shares of unrestricted stock. At the time, Delaware-based Greenway had "worthless stock, no assets, a negative bank balance and all business activity had ceased," the indictment said. The Arizona securities broker purchased a controlling interest in the company through a shell business affiliated with Cruz to hide his identity, documents said. They used a “pump and dump” scheme to tout the stock via press releases Loflin helped write and sold the shares for an inflated profit between October 2014 and May 2017, according to a Securities and Exchange Commission complaint against Loflin.

Court records say Loflin and an unidentified individual made about $152,800 from the sale of Greenway stock, a little less than half the total amount that was collected through the operation.

The SEC complaint, which was released last month, forbids Loflin from serving as the director of any company that issues stock or being involved in any penny stock offering.  

Loflin was identified by the SEC as someone who has been a chief executive officer of public and private companies for 18 years. According to his LinkedIn profile, he served as president of Diamond I Inc., chief executive officer of Louisiana Food Co. and chief executive officer of Clikia Corp. He stepped down last month as head of Clikia, a subscription service that offers more than 65 channels of streaming content from networks such as ESPN, USA Network, Disney and Comedy Central.

Loflin also filed for bankruptcy three times since January 2012, including a filing in May 2018 and a second one a few months later in October, bankruptcy court records show. He listed liabilities of $500,000 to $1 million and assets valued between $1 million and $10 million in both of the 2018 filings. Most of the money he owed was classified as consumer debt, identifying credit card lenders such as Chase and HSBC Card Services, along with the IRS and Louisiana Department of Revenue.

Follow Timothy Boone on Twitter, @TCB_TheAdvocate.