Securities Fraud Lawyers Blog
Early this month, the United States Department of Justice (DOJ) announced the indictment of five defendants, each of whom have been charged in connection with an $8.4 million “boiler room” and money laundering scheme. [1] In addition to the DOJ’s criminal indictment of the group, the Securities and Exchange Commission also filed a civil case seeking injunctions and civil penalties. [2]
“Boiler room” operations are fraudulent schemes in which high-pressure, coercive sales tactics are used to induce clients into purchasing stocks or other investments. [3] Often, these operations consist of groups of salespeople working from offices in foreign countries who cold-call clients in an attempt to defraud them. [3] The salespeople involved in boiler room schemes are rarely licensed brokers, and the stocks they purport to sell may not exist at all. [3]
In the instant case, the DOJ alleges that the defendants conspired to commit securities fraud when they engaged in a boiler room scheme involving fake investment firms and shell companies used to mislead investors. [1] The alleged scheme operated from approximately June 2019 until August 2021, and defrauded English-speaking investors across the globe of more than $8 million. [4]