Two Brazilian nationals have been indicted on money laundering and other charges related to an alleged $50 million international penny stock scam that took money from many international investors.
The two defendants, Marcos Macchione and Rodrigo Molina, face charges of money laundering, conspiracy, and participating in illegal financial transactions. The two men reside in Florida and are being charged in connection with their involvement with the US part of the securities scam. A Florida jury handed out the indictment in the U.S. District Court for the Southern District of Florida.
Doron Mukamal, the alleged leader of the telemarketing securities scam, was also arrested. He lives in Brazil, as do his 17 partners, employees, associates, and money launderers that were also arrested.
Asian and European investors were the primary victims of the scam. Mukamal and his team offered them the opportunity to buy nearly worthless stocks in U.S. micro-cap companies for much more than the penny stocks’ actual value.
The investors were told to pay an advance fee to cover escrow costs, taxes, and other services. This fee is not normally required for transactions that are legal.
Once the advance fee was received, the bogus broker-dealer would disappear. When investors contacted these fictitious brokers to find out what happened to their money, they were notified that warrants (that did not actually exist) or the rights to buy more shares held by the victims had been found. The bogus brokers would then try to persuade their targets to shell out even more money.
Mukamal and his team constructed Web sites that made it appear as if they were legitimate securities brokers. They also made up names of fictitious broker dealers, stole the identities of real U.S. brokers, fabricated false government entities that could confirm their broker-dealer’s legitimacy, and used U.S. phone numbers so that investors would think that the broker-dealers were located in the United States.
Related Web Resources:
U.S., Brazilian Law Enforcement Dismantle $50 Million Securities Fraud Organization, PRNewswire.com, March 20, 2008
What Is Penny Stock Fraud?