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A Baton Rouge businessman has pleaded guilty in a case in which he and others were accused of working together to illegally convert shares of a penny stock into a profit of hundreds of thousands of dollars.

Court records show David Loflin will be sentenced June 29 in a federal court in Phoenix. Loflin entered a plea agreement in late September. He faces up to five years in prison, a maximum fine of $250,000 or two times the financial gain resulting from the offense and three years of supervised release.

Loflin was accused of several counts by the Internal Revenue Service, including conspiracy, securities fraud, wire fraud and money laundering.

According to the indictment issued in May, Loflin and two other men, Heriberto Cruz, of Chino Hills, California, and Benjamin Bunker, of Las Vegas, 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. An 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.

Loflin was identified by the SEC as someone who has been a CEO of public and private companies for 18 years. According to his LinkedIn profile, he served as president of Diamond I Inc., CEO of Louisiana Food Co. and CEO of Clikia Corp. He stepped down in March 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. He currently lists his occupation as consultant. 

Cruz and Bunker also turned in guilty pleas and will be sentenced this spring.

Email Timothy Boone at tboone@theadvocate.com.