10 months ago

Five Canadians accused of fraud in the US stock market for $ 25 million

10 months ago

US authorities accuse five Canadians of fraud in the amount of $ 25 million in the stock market. It is reported by the publication Financial Post.

Fraudsters used fake documents to rebuild already defunct companies.

Company stock prices were artificially inflated using plagiarism sites and email newsletters. Fraudsters claimed that one of the companies produces personal protective equipment, while the other produces self-service kiosks for retail. However, the companies did not produce either one or the other.

The charges were brought against: 52-year-old Shane Schmidt from Vancouver, 38-year-old Nelson Gomez, a resident of Hong Kong, 31-year-old Michael Luck from Mississauga, 47-year-old Douglas Row from Vancouver and 36-year-old Kelly Varava from Vancouver. Schmidt was charged with securities fraud and conspiracy fraud.

One of the companies whose shares were traded on the stock exchange was Sandy Steele. The company was founded by a resident of Minnesota Sandy Steel, but ceased to exist in 2006. Fraudsters restored the company by forging documents.

The former owner of the company, Sandy Steel did not know that the company was restored, but its shares were successfully traded on the stock exchange. At the end of 2019, the company began supposedly producing clothes for cold weather.

The company’s website, renamed Sandy Tech, said the company was negotiating clothing supplies with the G20 and the military. Photos of goods were taken from other sites, and the company did not produce anything. However, scammers managed to fuel investor interest, and Sandy Tech’s stock price rose from $ 0.05 to $ 0.61.

In March, Sandy Tech “switched to the production” of medical masks. The company managed to sell up to 3 million shares per day. However, in April, the US Securities and Exchange Commission (SEC) suspended trading. According to the Federal Bureau of Investigation and the SEC, Schmidt and his colleagues managed to earn more than $ 25 million.

SEC intends to freeze the company’s assets and return money to defrauded investors.

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