Eight “Influencers” Charged With $114M Stock Scheme

December 14, 2022 Crime, Social Media

From the Justice Department:

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

According to court documents, Edward Constantinescu, aka Constantin, 38, of Montgomery, Texas; Perry “PJ” Matlock, 38, of The Woodlands, Texas; John Rybarczyk, 32, of Spring, Texas; Gary Deel, 28, of Beverly Hills, California; Stefan Hrvatin, 35, of Miami, Florida; Tom Cooperman, 34, of Beverly Hills, California; Mitchell Hennessey, 23, of Hoboken, New Jersey; and, Dan Knight, 23, of Houston, Texas, allegedly engaged in a wide-ranging securities fraud conspiracy.

The defendants 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.

From in or around January 2020 to in or around April 2022, the defendants profited at least approximately $114 million from their scheme.

According to the indictment, 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.

As further alleged in the indictment, 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.

The defendants made their initial court appearances yesterday. 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.

Most the of the Twitter handles listed below by the DOJ are still active and some have tweeted today.



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