Feds seize $214 million after 7 charged in "pump and dump" investment fraud scheme
Seven people in Malaysia and Taiwan have been indicted on charges accusing them of a massive "pump and dump" investment fraud scheme, that resulted in U.S. officials seizing more than $214 million in ill-gotten gains.
Federal prosecutors in Chicago said Lim Xiang Jie Cedric, 50, of Malaysia, Ming-Shen Cheng, 36, of Taiwan, Ko Sen Chai, 57, of Malaysia, King Sung Wong, 39, of Malaysia, Siong Wee Vun, 37, of Malaysia, Chien Lung Ma, 54, of Taiwan, and Kok Wah Wong, 56, of Malaysia, each have been charged with wire fraud and securities fraud. Arrest warrants have been issued for all seven defendants.
According to the indictment, the seven defendants set up a misleading investment scheme, selling shares of a Cayman Islands-based company called China Liberal Education Holdings, Ltd., claiming it provided educational services in China.
The defendants posed as U.S.-based investment advisors on social media and messaging apps, falsely promising significant returns on investments in the company.
After the stock on their company began to rise, they sold thousands of shares, netting millions of dollars in profits before the stock price ultimately plummeted, costing their clients nearly everything they had invested.
Federal investigators seized $214 million in proceeds from the scam, and have filed a request in court to have the money permanently forfeited to the U.S. government in order to return money to victimized investors.
The security fraud charges carry a sentence of up to 25 years in prison, and the wire fraud charges carry a maximum sentence of 20 years.
