The arrests resulted from an indictment charging nine defendants with 24 counts of securities fraud, wire fraud, and false personation of Internal Revenue Service (IRS) employees in connection with the sale of securities and conspiracy – the investigation showed that the identities used were fictitious and that no IRS employees were involved in the scheme.
The FBI said the indictment and arrests were the result of one of the largest international penny stock investigations ever conducted by the Department of Justice and the bureau and marked the unveiling of a multi-year, ongoing investigation, which included significant assistance from the Royal Canadian Mounted Police, as well as from other US agencies and law enforcement authorities in England, as well as assistance from Thailand and China.
“The defendants used our securities markets as a platform from which to run elaborate fraudulent schemes to victimize unsuspecting investors across the globe. Where others saw citizens of the world, the defendants saw a pool of potential marks,” said US Attorney Loretta Lynch.
“They cheated, lied, and swindled investors into buying billions of shares of worthless stock, then turned around and used a second scam to cheat those investors again. But today, the defendants were the marks, and it was law enforcement that ran the table.”
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