Eight indicted for $114 million fraud scheme: How Social Media is Used for Misinformation

Morale of the story?  Be careful who you follow & listen to in social media

HOUSTON – A federal grand jury in the Southern District of Texas returned an indictment that was unsealed Tuesday  charging eight men with conspiracy to commit securities fraud for a long-running, social media-based “pump and dump” scheme.

Those indicted include Edward Constantinescu aka Constantin 38, of Montgomery; Perry “PJ” Matlock, 38, of The Woodlands; John Rybarczyk, 32, of Spring; Dan Knight, 23, of Houston; along with Gary Deel, 28, and Tom Cooperman, 34, both of Beverly Hills, California; Stefan Hrvatin, 35, of Miami, Florida; and Mitchell Hennessey, 23, of Hoboken, New Jersey.

The defendants  allegedly engaged in a wide-ranging securities fraud conspiracy in which  they used their extensive social media presence on Twitter and Discord to hype interest in particular securities by posting false and misleading information in order to “pump” the prices of those securities, while concealing their intent to later “dump” their shares by selling them at the artificially inflated prices.Just Wednesday, we wrote posited that the Forbes piece Boiling Cauldron: Cybersecurity Trends, Threats, And Predictions For 2023 by Chuck Brooks is an interesting read, but reads more like subliminal propaganda or as CNN might say, an example of a cynical strategy. Since he removed a LinkedIn post with a link to the article, after I opined, supports my argument.

From in or around January 2020 to in or around April 2022, the defendants allegedly profited at least approximately $114 million from their schemeAnd the just released Twitter Files reveal how the US Government used a secret Twitter portal to censor content that contradicted the governments narrative, ditto for Facebook. No different than the Mullahs’ use of deep scanning to quench the Arab Spring

Morale of the story?  Be careful who you follow & listen to in social mefia.

The defendants collectively had over 1.5 million followers on Twitter to whom they allegedly disseminated false and misleading information about the securities that they pumped and dumped as part of the charged scheme.

 In addition to their Twitter presence, the defendants also allegedly ran an online community for individual stock traders called Atlas Trading, which defendants promoted as one of the largest, free online communities in the world for individual stock traders and which had a chatroom called Atlas Trading Discord. The defendants also allegedly used Atlas Trading Discord to disseminate false and misleading information about securities that they pumped and dumped as part of the charged scheme.

The defendants allegedly used the following aliases on Twitter and Discord to perpetuate the scheme:

The  defendants taking advantageof one of the deadly sins, envy – in the Book of Genesis envy is said to be the motivation behind Cain murdering his brother, Abel, as Cain envied Abel because God favored Abel’s sacrifice over Cain’s. Envy is among the things that comes from the heart, defiling a person – the defendants  used their social media credibility to maximize their own profits at the expense of their followers, holding themselves out as skilled stock traders by posting pictures showcasing their profits and extravagant lifestyles and encouraging people to follow them on social media in order to share in their financial gains.

All defendants are charged with one count of conspiracy to commit securities fraud. Additionally, Constantin is charged with three counts of securities fraud and one count of engaging in monetary transactions in property derived from specified unlawful activity; Matlock and Deel are both charged with five counts of securities fraud; Rybarczyk is charged with four counts of securities fraud; and Hrvatin, Cooperman and Hennessey are each charged with two counts of securities fraud.

The defendants made their initial court appearances ztuesdsy. If convicted, each defendant faces a maximum penalty of 25 years in prison for conspiracy to commit securities fraud and each charged count of securities fraud. Constantin also faces a maximum penalty of 10 years in prison if  convicted of engaging in unlawful monetary transactions.

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