NEW YORK (Reuters) - Authorities in Thailand have arrested a Canadian man accused of masterminding a $140 million plan to defraud investors in U.S. penny stocks, as well as another man who allegedly ran the scheme, federal prosecutors in New York said on Tuesday.
The move follows arrests last week of six people in the United States and one in Canada allegedly involved in one of the largest international penny stock investigations ever conducted by the Justice Department and FBI, prosecutors said.
Sandy Winick, the Canadian accused of orchestrating the scheme, was arrested in Thailand on Saturday. Gregory Curry, also Canadian, was arrested there earlier on Tuesday, the U.S. Attorney’s Office for the Eastern District of New York said in a statement. Curry’s son was among those arrested last week.
Both now face extradition to New York, the statement said.
“They thought that they could simply run away from their crimes,” U.S. Attorney Loretta Lynch said. “Today, with the help of our friends in Thai law enforcement, we once again showed that fraudsters cannot hide from the law.”
The so-called “pump and dump” scheme involved fraudulently pumping up the price of penny stocks and dumping them to investors in 35 countries, prosecutors said. The group also operated call centers to induce investors to pay fees for non-existent services to sell their illiquid penny stock shares, in a so-called “advance fee scheme,” according to an indictment.
The charges against the nine defendants include 24 counts of securities fraud, wire fraud and false impersonation of Internal Revenue Service employees.
Prosecutors said Winick has lived in China, Thailand, Vietnam and the United States.
Others charged include Gregory Curry’s son, Kolt Curry. The father and son managed call centers around the world, including in Canada, Thailand and Britain, and were planning to open a call center in Brooklyn, according to prosecutors. They also prepared false letters, websites and email accounts to deceive potential and actual victims, prosecutors said.
Reporting by Bernard Vaughan; editing by Andrew Hay