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A massive penny stock fraud scheme that bilked Canadian and foreign investors of more than $140 million was masterminded by four Canadians and carried out with the help of five Americans, the U.S. Department of Justice said Tuesday.
One of the Canadians was arrested in Ontario and another one was among six suspects arrested in the U.S., authorities said.
Two other Canadians are being sought in what the department is calling one of the largest international penny stock frauds in history.
Gregory Ellis, 46, and Kolt Curry, 38, are in custody but authorities said Sandy Winick, 55, remains at large in Thailand and Gregory Curry, 63, has yet to be located.
Ellis, who lived in Canada at the time of his arrest, acted as president of several of the companies that issued the stocks, according to the indictment.
Winick 220;orchestrated” the schemes and had lived in Canada, the U.S., China, Thailand and Vietnam over the years, the document said. He allegedly was recruiting staff to open new call centres to expand the operation in New York City and Toronto.
Gregory Curry helped manage the existing call centres in Canada, Vietnam and Thailand, where he lived, the document said. He worked with Kolt Curry, who split his time between Canada and Thailand, it said.
The two Curry men — whom the department identified as father and son — also prepared letters and email accounts to promote the con, the indictment said.
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. The RCMP declined to comment on the investigation.
The indictment alleges that the defendants were involved in a massive “pump and dump” scheme — buying controlling interests in sketchy startup companies, then artificially inflating their value by promoting them in fictitious emails, social media messages and news releases.
The fraudulent sales campaign generated more than $120 million in investments by tens of thousands of people in the United States, Canada and 33 other countries, authorities said.