When (alleged!) Canadian penny-stock fraud maestro Sandy Winick had to choose a place to hide from the U.S. authorities, he could have gone to Russia or Ecuador or Venezuela, where he might have lived out his life thumbing his nose at Washington and spending whatever of the $140 million he (allegedly!) stole that his generous hosts allowed him to keep. Instead, he went to Thailand.
Today the Justice Department indicted nine people for operating “one of the largest international penny stock frauds and advance fee schemes in history” and as you’d expect from that description it was a very professional multinational operation.1 I mean, y’know, it was a penny-stock pump-and-dump scheme, one involving “distributing false press releases, announcing non-existent business ventures and fake mergers, posting false information on social media sites and bribing stock promoters and brokers,” but it was a penny stock pump-and-dump scheme that made $120 million, so that’s impressive.2
So, fine. Here you are having successfully executed a pump-and-dump scheme. You pumped, then you dumped. You have $120 million, other people have worthless stock. You could stop there and call yourself a pretty successful criminal. But then you get to thinking: the people you defrauded have something else, in addition to their worthless stock. They have something that is actually extremely valuable. They have: an abnormal willingness to piss away money on terrible ideas! They have a complete lack of common sense! And you know who they are!
So why not make some money off of that? A second-rate crook might think “well I’ll sell them some more penny stocks” but of course they’ve just been burned. They’re idiots, yes, but they’re idiots who’ve been put off penny stocks for a while. They’re still mad about the last penny stock. But what if there were some way to take advantage of exactly that fact? Read more »
This is a relief. Read more »