Paul Wayne Nielsen, Sandy, is no longer an unindicted co-conspirator in an alleged penny stock fraud. He pleaded guilty this week to two felony counts of conspiracy and securities fraud.

Nielsen was named an unindicted co-conspirator in a federal grand jury indictment issued Jan. 18. The indictment was handed up after FBI agents conducted a yearlong undercover sting operation.U.S. District Judge J. Thomas Greene set sentencing of Nielsen for May 9.

The felony charge describes Nielsen as a middleman for accounts and attorneys in the establishment of shell corporations, which are sometimes the vehicle for penny stock manipulations.

It says that from Sept. 1, 1987, until Sept. 30, 1988, Nielsen and others conspired to commit a fraud - "to provide the undercover (FBI) agents with a public shell corporation to be merged into a private corporation." This type of action is called a "box job."

According to a plea agreement prepared by the U.S. attorney's office, the government promised not to file further charges against him concerning the creation of Protecto Industries and the marketing of its stock.

Meanwhile, Nielsen is to provide complete information to FBI, Internal Revenue, and Securities and Exchange Commission agents, as well as to the U.S. attorney's office and other investigators.