NEW YORK – (Reuters) – Federal prosecutors said on Tuesday they arrested seven people in a more than $140 million international penny stock scheme that involved fraudulently inflating share prices and trading volumes.
Two people charged, including the alleged mastermind, remain at large, according to the office for the U.S. Attorney for the Eastern District of New York.
The fraud generated funds from investors in about 35 nations through various brokerage and bank accounts, according to a statement from the office of U.S. Attorney Loretta Lynch in Brooklyn.
The arrests, made in five states and in Canada, followed one of the largest international penny stock investigations ever conducted by the U.S. Department of Justice and the FBI, according to the statement.
“As alleged in the indictment, the defendants used our securities markets as a platform from which to run elaborate fraudulent schemes to victimize unsuspecting investors across the globe,” Lynch said in a statement. “Where others saw citizens of the world, the defendants saw a pool of potential marks.”