NEW YORK, N.Y. – Four Canadians and five Americans have been charged in what U.S. officials call one of the largest international penny stock frauds in history.
One of the Canadians was arrested in Ontario and another one was among six suspects arrested in New York, Arizona, New Jersey, Florida and California, the U.S. Department of Justice said Tuesday.
Two other Canadians are being sought.
The arrests were the result of a multi-year investigation involving the FBI and the RCMP, the department said, adding it relied on wiretaps in the U.S. and undercover agents abroad.
It said the suspects are accused in two separate but connected schemes that netted more than $140 million and affected investors in dozens of countries.
“Where others saw citizens of the world, the defendants saw a pool of potential marks,” U.S. Attorney Loretta Lynch said in a statement.
“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.”
An indictment accuses the defendants of artificially inflating the value of worthless penny stocks and selling them to investors across the globe.
They also allegedly tricked the victims into paying to join phoney lawsuits to recoup their losses.
In some cases, it’s alleged the accused pretended to work for the U.S. Internal Revenue Service and collected a “bogus advance tax” from investors before they could unload their penny stocks, the Justice Department said.
Two of the Canadian suspects — Gregory Ellis, 46, and Kolt Curry, 38 — have been arrested.
But authorities said Sandy Winick, 55, remains at large in Thailand and Gregory Curry, 63, has yet to be located.
The American suspects are Gary Kershner, 72; Joseph Manfredonia, 45; Cort Poyner, 44; Songkram Roy Sahachaisere, 43; and William Seals, 51.
The charges include conspiracy to commit securities fraud, conspiracy to commit wire fraud, wire fraud, securities fraud and false personation of an officer of the United States.
If convicted, the accused could face up to 20 years of imprisonment for each count of conspiracy to commit wire fraud, wire fraud and securities fraud, as well as up to five years for conspiracy to commit securities fraud.
The false personation charge could carry a three-year prison sentence.