Investment Fraud Online Case Examples
Wanda Robertson (Indiana)
Method of fraud: Craig’s List website
Earlier this year, the Indiana Securities Division worked to obtain a criminal conviction of an Indiana woman who solicited victims using the website Craig’s List. In addition to asking people to invest money in her fake company, Wanda Robertson also asked for their personal information. She later used this information to apply for loans and credit cards. Following the investigation by the Indiana State Police with assistance from the Prosecution Assistance Unit, Robertson plead guilty to three Class C felony violations of the Indiana Securities Act – and was sentenced to four years in prison, to be followed by four years of probation. Robertson was also ordered to repay over $170,000 to victims of her scheme. Read more.
Gold Certificate Securities (Canada)
Method of fraud: Dating website
In June 2010, a New Brunswick resident fell victim to investment fraud via an online dating website. The fraudster contacted the victim on the dating site, built a relationship with them and eventually offered the chance to invest in gold certificates. The victim lost thousands of dollars before a bank employee suspected the victim might be involved in a scam based on the quantity and frequency of withdrawals from their account. Read more.
Isaac Bruton (Colorado)
Method of fraud: Craig’s List website
Earlier this year, Isaac Bruton, who also went by Michael Brouton, was ordered by Colorado Securities Commissioner Fred Joseph to stop seeking investors in his "stock trading program" in which he promised 100-percent monthly returns. He promoted the investment opportunity using the website Craig’s List. He allegedly used investor funds to pay for personal expenses and failed to register the securities with the state. The state sued Bruton in March. Read more.
Imperia Invest IBC (Maine)
Method of fraud: Online chat communities
In May 2010, the Maine Office of Securities issued a cease and desist order prohibiting the company Imperia Invest IBC from soliciting Maine investors through the offer of unregistered securities. The company solicited victims online, most notably using an online chat site for people who are deaf. One victim invested $1,000 after being promised a multi-million dollar payout within six months. Read more.
Phillip Offil, Jr. (Michigan)
Method of fraud: Spam e-mail messages
Texas Securities lawyer and 15-year employee of the U.S. Securities and Exchange Commission, Phillip W. Offil, Jr. offered shares of the Michigan-based AVL Global, Inc. to public investors while his colleagues manipulated the demand for the stock. Though AVL Global was essentially a defunct business, Offil’s scheme created demand for over 15 million shares through misleading press releases and spam e-mail messages, resulting in aggregate losses of more than $4.8 million from victims. Via unsolicited fax and e-mail messages, company officials claimed that there was, “a dramatic increase,” for its products and that the Botswana Department of Defense may purchase thousands of GPS devices from AVL. However, by this time the small African country had declined to purchase the products because the nation did not receive adequate satellite coverage to facilitate GPS usage, and AVL Global had actually closed its manufacturing plant and moved into a 100-square foot office with only one employee. Offil was sentenced to eight years in prison on April 23, 2010. Read more.
James Rivera (Maine)
Method of fraud: Webinars
In 2008, the Maine Office of Securities warned investors about Almighty Winds, Inc., and Apostles, Inc., two companies supposedly developing new technologies using windmills. James Rivera, who operated out of California, made sales pitches to Maine investors over the internet using webinars. He also appeared to have used his participation in a non-denominational Christian church to identify potential investors, who in turn recommended other investors based in part on their shared religious beliefs. Ultimately, the investment he was offering weren’t registered with the Office of Securities nor was he licensed to sell securities in Maine and victims lost a total of $215,000. Read more.
Jonathan Curshen (Colorado)
Method of fraud: various websites
The U.S. District Court for the District of Colorado ordered Jonathan Curshen to pay pre-judgment interest of $50,718.48 and a $66,235 civil penalty for his role in an online “Pump and Dump” scheme. Curshen was found to have knowingly failed to disclose that he was being paid to promote the common stock of Freedom Golf Corporation, a struggling corporation that is now out of business. Curshen posted a link to a fabricated “investor report” on various websites, despite his knowledge of the company’s failing financial stability. He also posted numerous messages touting Freedom Golf on various websites without disclosing he was a paid promoter or that he was personally benefitting from selling Freedom Golf stock. Read more.
Carol McKeown and Daniel Ryan (Canada)
Method of fraud: Facebook, Twitter, company website
The SEC alleges that since at least April 2009, Carol McKeown and Daniel F. Ryan, a couple residing in Montreal, Canada, received millions of shares of touted companies through their two corporations, defendants Downshire Capital Inc., and Meadow Vista Financial Corp., as compensation for their touting. McKeown and Ryan sold the shares on the open market while PennyStockChaser simultaneously predicted massive price increases for the issuers, a practice known as "scalping." According to the SEC's complaint, the defendants profited by selling penny stocks at or around the same time that they were touting them on http://www.pennystockchaser.com/. The pair fraudulently touted penny stocks through their website as well as on Facebook and Twitter. The SEC alleges that McKeown, Ryan and their corporations have realized at least $2.4 million in sales proceeds from their scalping scheme. Read more.
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