A Georgia telemarketing executive pleaded guilty Tuesday to obstructing federal regulators' probe of an alleged nationwide securities fraud scheme that used voicemail messages made to seem accidentally left on people's answering machines to pique their interest in stocks.

Michael J. O'Grady (search), who was the president of Georgia-based Telephone Broadcast Co. LLC (search), entered the plea to one count of obstruction of justice in U.S. District Court in Washington. He faces a likely prison sentence of 10 to 16 months and is cooperating in the investigation. Authorities say the scheme drove up the combined market value of six small company stocks by about $179 million in 26 days last summer.

Prosecutors said O'Grady altered, destroyed and concealed records and documents, and told a Telephone Broadcast employee to delete company computer files. In August, O'Grady and two stock promoters went to a Gulfport, Miss. casino where they gave him $10,000 out of a blue duffel bag, according to the Securities and Exchange Commission (search).

O'Grady himself profited from trading in three of the stocks, the SEC said.

In a related civil settlement with the SEC, whose investigation he admitted impeding, O'Grady, 38, agreed to pay a $25,000 fine and $50,786 in restitution plus interest. He did not admit or deny wrongdoing in the SEC agreement.

The SEC also filed charges against Telephone Broadcast and its affiliate, Telephony Leasing Corp. LLC (search), for allegedly broadcasting the "wrong number" voicemail messages touting the stocks. The messages were part of a scheme enabling stock promoters in Houston to sell some $4.5 million of one of the stocks through a brokerage firm in Tampa, the SEC said. The two companies controlled by O'Grady were not fined in the settlement but agreed to an injunction barring them from future violations of securities laws.

The scheme allegedly spawned a copycat scam involving thousands of similar phony voicemail messages. In that case, the SEC filed charges against David E. Whittemore of Dallas, his company Whittemore Management Inc., Peter S. Cahill of Houston and his company Clearlake Venture Group.

An attorney representing Whittemore, Phillip Offill, didn't immediately return a phone call seeking comment. Cahill's attorney, Dan Waller, said he hadn't yet reviewed the SEC's complaint and declined to comment.

O'Grady, who lives in Augusta, Ga., and the stock promoters engaged in a so-called "pump and dump" stock scheme, the authorities said, using the voicemail messages to get people to buy the stocks to inflate their prices and then selling their blocks of shares at a profit. Ordinary investors suffered heavy losses when the prices tanked amid the share dumping.

His attorney, Bruce Bettigole, could not be immediately reached for comment.

The messages went to hundreds of thousands of households nationwide last summer, the authorities said. They were often made by a caller identifying herself as "Debbie" who wanted to pass along to a girlfriend a "hot" stock tip from a "stock exchange guy" she's dating.

"Debbie," in real life the wife of a stock promoter in Altamonte, Springs, Fla., hired O'Grady and his telemarketing firms to distribute the voicemail messages, the SEC alleged. It did not name the promoter.

An estimated 9,500 calls were made to the disposable cell phone numbers left on some messages as return numbers, the SEC said. The agency said the messages prompted 1,690 complaints from people in 43 states and the District of Columbia, with 676 of them from Florida.

It was the third prosecution in 10 months by the U.S. Attorney for the District of Columbia for obstruction of an SEC investigation.

"Stock fraudsters should be on notice that they face a determined team of securities enforcers, criminal investigators and prosecutors when they undertake to obstruct the SEC's enforcement efforts," U.S. Attorney Kenneth Wainstein told reporters at the courthouse.

The stocks involved in the initial scheme were American Multiplexer Corp., Donini Inc., 5G Wireless Communications Inc., Innovative Food Holdings Inc., Maui General Store Inc. and Power3 Medical Products Inc., the SEC said.