Core Viewpoint - The Justice Department is working to compensate victims of a $214 million investment fraud involving impersonation of U.S.-based financial advisors to deceive investors [1] Group 1: Fraud Scheme Details - Seven individuals executed a "pump-and-dump" scheme, falsely promising significant returns from investments in Chinese Liberation Education Holdings (CLEU), which claimed to provide educational services in China and was incorporated in the Cayman Islands [2] - The fraudsters, based in Malaysia and Taiwan, posed as U.S.-based investment advisors on social media, claiming to operate from locations like Chicago [4] - The defendants began soliciting investments in CLEU stock in January 2025, failing to disclose that they had received shares directly from the company prior to its public listing on Nasdaq [5] Group 2: Impact on Investors - The misleading promotion led to a significant increase in CLEU's stock price after its public offering, allowing the schemers to sell their shares and profit substantially [6] - Following the public listing, CLEU's SEC filing revealed the actual number of outstanding shares, causing the stock price to plummet by approximately 99%, resulting in substantial losses for investors [7] Group 3: Recovery Efforts - The U.S. Attorney's Office successfully obtained forfeiture of about $214 million in proceeds from the fraudulent scheme, with funds now ready to be distributed to victims [8]
DOJ Works to Compensate Victims of $214M Pump-and-Dump Scam