Feds Allege "Pump and Dump" Fraud Involving Panamanian Banks, Long Beach Fugitive and Sports Drink Named After Notre Dame's Rudy
Daniel "Rudy" Ruettiger

Feds Allege "Pump and Dump" Fraud Involving Panamanian Banks, Long Beach Fugitive and Sports Drink Named After Notre Dame's Rudy

A Long Beach man who is believed to have fled to his native South Africa has been charged with running a $5.2-million "pump and dump" investment fraud that involved a sports drink named after Daniel "Rudy" Ruettiger of Notre Dame football and Rudy movie fame, money laundered through Panamanian banks and a $400,000 Lamborghini Murcielago pay-off.

A federal grand jury in Santa Ana this week indicted Chad Peter Smanjak, 37, on 10 counts of aiding wire fraud and one count of money laundering.

Rudy Nutrition advertising
Rudy Nutrition advertising

Federal prosecutors claim Smanjak and others obtained millions of shares of penny stock in the Rudy Nutrition sports drink company and then pumped up the trading volume by trading it among themselves and issuing misleading press releases. They allegedly then dumped the stock on the market until federal regulators halted trading in 2008.

Smanjak fled to his native South Africa earlier this year after authorities executed a search warrant and is considered a fugitive, according to U.S. Immigration and Customs Enforcement (ICE), which is joined by the Office of Homeland Security Investigations (HSI) and the Internal Revenue Service (IRS) in the criminal probe, with assistance from the Securities and Exchange Commission (SEC).

The SEC on Nov. 14, 2008, revoked the registration of each class of registered securities of Rudy Nutrition for failure to make required periodic filings with the commission. Ruettiger, whose story of becoming a member of the Notre Dame Fighting Irish football team is depicted in the 1993 film Rudy, was the CEO of Rudy Nutrition, which was marketed as a health-conscious alternative to high-sugar soda and sports drinks. Ruettiger has not been charged with a crime in the wire fraud case.

The indictment alleges that Smanjak and others, after obtaining millions of shares of stock in Rudy Nutrition, artificially increased the trading volume of the stock and generated the appearance of market demand. They then "dumped" about 600 million shares of Rudy Nutrition stock on the market, fraudulently realizing a profit of approximately $5.2 million, the indictment charges.

More than 630 million shares were issued to several Smanjak-controlled Panamanian companies, which sold them and kept the proceeds in Panamanian banks, which then wired the funds back to U.S. accounts held by Smanjak and his co-conspirators, according to the complaint.

Smanjak paid his trader with a $400,000 Lamborghini Murcielago, according to ICE, which has seized the car as part of the investigation.


All-access pass to the top stories, events and offers around town.

  • Top Stories


All-access pass to top stories, events and offers around town.

Sign Up >

No Thanks!

Remind Me Later >