CHICAGO (WLS) — Seven people have been indicted in connection with a federal investigation into a massive investment fraud scheme.
Federal authorities at the FBI Field Office based in Chicago announced the confiscation of $214 million in stolen funds as part of their probe into a fraudulent scheme known as a ramp-and-dump operation that targeted numerous investors.
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The investigation revealed that scammers from China masqueraded as American investment advisors on various social media platforms to attract investors into buying stocks with promises of significant returns on their investments.
An indictment filed last week in U.S. District Court in Chicago claims the scheme unfolded from November 2024 to February 2025.
The I-Team spoke with Special Agent Joseph M. Holzman of the FBI-Chicago Field Office who said the agency is now looking for potential victims.
“The victims, who were not limited to specific groups but included a wide range of individuals seeking investment opportunities, fell prey to these schemes after interacting with the fraudsters on platforms like Facebook. The scammers would then redirect the victims to WhatsApp groups, where they posed as U.S.-based advisors offering financial guidance and pushing them to invest in a particular stock called CLEU. Although our focus is in Chicago, it is important to note that the victims were located across different regions, both nationally and internationally,” an official stated.
The FBI is also offering advice for anyone looking to make a safe investment.
“Truly, if it sounds too good to be true, it is, I mean, if you have an investment advisor who is telling you that they can get you 200% to 400% profit within a month, if they had that advice, they would be doing it themselves, and they wouldn’t need you. So, truly, if the hair is raised on the back of your neck, do your due diligence,” said Holzman.
According to the indictment, the misleading promotion and coordinated trading caused the stock price to artificially rise, at which point the defendants sold thousands of shares and made millions of dollars in profits and the stock price ultimately decreased significantly, at the expense of other investors, some of whom lost almost the entirety of their investment.
Seven individuals are now charged with wire fraud and securities fraud.
No one is currently in custody and warrants have been issued for their arrests in Malaysia and Taiwan.
The FBI is asking anyone who thinks they were victimized in the “ramp-and-dump” investment fraud scheme to fill out a short form.
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