Thursday, July 23, 2015

Pump-n-Dump Spammers Arrested in Israel

A trio of Pump-n-Dump spammers have had their indictments unsealed and two have been arrested in Israel. The charges were brought against:
  • Joshua Samuel Aaron, aka Mike Shields, age 31, US Citizen living in Israel
  • Gery Shalon, aka Phillipe Mousset aka Christopher Engeham, age 31, native of Republic of Georgia, Israeli citizen
  • Zvi Orenstein, aka Aviv Stein aka John Avery, age 41, Israeli citizen
Shalon and Orenstein were arrested July 21, 2015 in Israel. Aaron remains at large.
Some of the symbols they are charged with pumping include:

  • SHOM = Southern Home Medical Equipment -- 1800% increase - sold 15 million shares for $300,000 profit
  • GRAS = Greenfield Farms Grassfed Beef, Inc. -- 286% increase - sold 286,000 shares for $123,000 profit
  • NGMC = Next Generation Energy Corporation -- 93% increase - sold 93,000 shares for $36,000 profit
  • MSTG = Mustang Alliances, Inc -- 65% increase - sold 4.4 million shares for $2.2 Million profit
  • IDOI = IDO Security, Inc -- sold 900,000 shares for $580,000 profit
  • BRND = Premier Brands, Inc -- sold 275,000 shares for at least $216,000 profit
From the indictment:

In 2011 and 2012, the Defendants controlled at least twenty stock promotion websites as well as various email address lists. In a typical promotional campaign, the Defendents sent multiple emails touting the same issuer, purporting to come from different, seemingly unrelated sources. Many of these email urged recipients to buy shares of the issuers as soon as possible.
Aaron wrote, created, and helped design the email and website promotions.
Shalon contributed to the email content, sent out the promotional emails, and approved the use of funds by Orenstein to purchase domain names.
Orenstein handled back-office duties, such as setting up websites, maintaining brokerage accounts using aliases, directing payments to third parties; and often communicating with the financial firms about these accounts on behalf of the Defendants.

Here are a couple example stock charts showing the increased activity that the "Pump" of the stock via email spam generated.

This is one of several high profile Stock Pump-n-Dump scams indicted recently by the FBI.  Here are some of their recent arrests and indictments:

The 19-page indictment is available here.

Another recent case, the first guilty plea among nine pump-n-dumpers indicted in 2013, was also announced last week:

"Canadian Citizen Pleads Guilty to Leading an International Fraud Scheme" - July 17, 2015 - the accused, Sandy Winick, age 57 from Ontario, Canada, plead guilty after being extradited from Thailand to stand charges.  Sandy was aka Jerry Sarrano, John Peter Smith, Abdiel Vergara, Robin Cheer, Glen Forman, Kyle Bendford, and Stephen Thompson.  27 charges were made, including Conspiracy to Commit Securities Fraud, Conspiracy to Commit Wire Fraud, Conspiracy to Commit Mail Fraud, Wire Fraud, Securities Fruad, and False Impersonation of an Officer and Employee of the United States (for pretending to be Trevor Duncan and Daniel Summers).