San Diego, USA (September 25, 2020) – The U.S. Attorney’s Office of the Southern District of California laid charges against four men – three of them Canadians – over their roles in an alleged pump-and-dump scheme and a stock market manipulation ring. Ongkaruck Sripetch (45) of Washington, Michael Wexler (74) of Ottawa, Ashmit Patel (36) from Oakville, and the Canadian Andrew McAlpine (47) from Grand Cayman are accused of securities fraud surrounding two publicly-traded stocks – VMS Rehab Systems and Argus Worldwide. Furthermore, the U.S. Securities and Exchange Commission is also seeking permanent bans, disgorgement, and civil penalties for the four men. U.S. authorities have already arrested McAlpine and Sripetch on September 18 and are seeking the arrests of Patel and Wexler.
According to an indictment unsealed on September 21, the U.S. Attorney’s Office of the Southern District of California charged four men with securities fraud in connection with an allegedly illegal pump-and-dump scheme. Three of the accused men are Canadian citizens.
U.S. pump-and-dump scheme
U.S. authorities accused four men of participating in an alleged pump-and-dump scheme surrounding two publicly-traded stocks. According to court documents, Ongkaruck Sripetch (45) of Washington, the businessman Michael Wexler (74) of Ottawa, the securities attorney Ashmit Patel (36) from Oakville, and the Canadian Andrew McAlpine (47) recently residing on Grand Cayman are alleged of being members of a stock fraud ring.
They supposedly artificially inflated the prices of Ottawa-based VMS Rehab Systems and Argus Worldwide stocks, which are headquartered in Wyoming. Then, they allegedly quickly unloaded their shares of the penny stocks before the prices collapsed. Furthermore, the U.S. attorney said that part of their scheme was to trade the stocks between themselves in order to create the appearance that investors were genuinely interested in and actively trading the stocks. This way, they allegedly manipulated the market and enticed investors to purchase VMS Rehab and Argus Worldwide stocks at artificially high prices.
‘These defendants sought to boost the stock price of two companies, and then leave innocent investors with investments that they knew would almost immediately lose most or all of their value,’ said U.S. Attorney Robert Brewer regarding the alleged pump-and-dump scheme.
SEC is seeking permanent bans and civil penalties
The U.S. Securities and Exchange Commission (SEC) is also taking action against the micro-cap market manipulation ring, which they announced in a press release issued on September 23. According to the SEC’s complaint, the defendants engaged in various schemes to manipulate microcap stocks and defraud retail investors between 2013 and 2019 and allegedly obtained a total of over $6 million in illicit profits.
‘As we alleged in the complaint, the defendants created a sophisticated network that enabled them to engage in multiple fraudulent schemes, making millions of dollars in unlawful profits at the expense of retail investors,’ said Richard Best, director of the SEC’s New York office, in the release. The SEC secured court orders that freeze assets and provide other emergency relief. They are seeking permanent bans, disgorgement, and civil penalties.
Two men arrested
On September 18, McAlpine was taken into custody as he entered the U.S. and Sripetch was incarcerated in Gig Harbor, Washington. The U.S. authorities are seeking the arrests of the Canadians Patel and Wexler. They are all facing criminal charges of conspiracy to commit securities fraud, securities fraud, and manipulative securities trading. The U.S. attorney’s office informed that the maximum penalty includes twenty years in prison and a US$5 million fine. None of the allegations have been proven in court.
The criminal charges followed an investigation in which one of the participants in the market manipulations cooperated with the U.S. authorities as a confidential informant while the alleged scheme was running, against the knowledge of his alleged co-conspirators.
‘Today, Grand Cayman resident Andrew McAlpine and co-conspirator Ongkaruck Sripetch were arrested by FBI Agents and will face the charges for this alleged conspiracy,’ announced Suzanne Turner, Special Agent in Charge of the FBI’s San Diego Division. ‘The FBI will continue to seek justice for those who are victimized by unscrupulous actors that manipulate our financial markets no matter where they reside.’
Marina Burghard writes for Canadian Fraud News about fraud-related cases, whistleblower, jurisdiction, identity theft, consumer protection, etc. – essentially about scams and how to protect yourself against this kind of fraudulent criminal behavior. She holds a Master’s degree in Political Science where her interest in criminology grew. Besides fraud, Marina’s scientific interest lies in terrorism, extremism and how to deal with it as a society.