The SEC has charged three individuals from Nigeria for allegedly operating an elaborate online scheme, stealing real financial professionals' identities to fleece retail investors out of millions of dollars.
According to a complaint published by the SEC Wednesday and filed in the US District Court for the District of New Jersey., the defendants impersonated licensed securities brokers and investment advisers to steal over $2.9 million from dozens of victims.
"During their fraudulent scheme, Defendants impersonated at least 22 Representatives and stole at least $2.9 million from at least 28 investors, at least 23 of whom reside in the US," the SEC complaint read.
The alleged fraud, which began in 2019, involved the creation of fake websites mimicking reputable US financial professionals from well-known securities firms. These sites were bolstered by falsified testimonials on social media and investment forums, portraying the impersonated advisors as highly successful traders.
The SEC claims the trio solicited victims on monthly returns of up to 25% and tricked them into using fake online platforms that simulated growing investment portfolios. Among other falsehoods, they reportedly told investors to purchase and send them cryptocurrencies like Bitcoin, directed them to fake online investment platforms, and claimed to use a copy trading platform that synced up the investor's account with professional advisors' trading patterns.
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To further enhance their deception, the defendants reportedly used voice-masking software to impersonate women, aligning with the gender of many of the real professionals they impersonated.
“Today’s charges highlight how fraudsters can manipulate online information and use technology to gain trust with investors,” Sanjay Wadhwa, Acting Director of the SEC’s Division of Enforcement said in a statement. “We caution the investing public to be on heightened alert when investing with someone who is soliciting investments through social media, even if that person appears to be a financial industry professional.”
The SEC's charges include violations of the Securities Act of 1933, the Securities Exchange Act of 1934, and the Investment Advisers Act of 1940. The agency is seeking permanent injunctions, conduct-based injunctions, disgorgement with prejudgment interest, and civil penalties against the defendants.
In a parallel move, the US Attorney’s Office for the District of New Jersey has also filed criminal charges against Onyeachonam, Asiegbu, and Nweke-Eze.
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