The Frankowski Firm is investigating a penny stock fraud scheme that allegedly defrauded $290 million from thousands of investors, involving eight people who are facing criminal charges. Four of the eight charged in the pump-and-dump scheme were arraigned last week after a two-year investigation. Anthony Thompson of Bethesda, Maryland, Jay Fung of Delray Beach, Florida, Hanna Schmieder of Los Angeles, California, and Kenneth Oxsalida of Sebring, Florida all pleaded not guilty in state Supreme Court in Manhattan, New York.

Thompson, Fung, and another stock promoter allegedly sent email blasts from websites they controlled promoting stocks to potential investors while working with others in the scheme to take control of public shell companies, merge private companies into them, transfer millions of shares to themselves, and drive up the price of the stocks, according to prosecutors. After they were in control of the shares, they sent press releases promoting companies, including Xynergy Holdings Inc. and Mass Entertainment Co. They then dumped their shares before the stocks plummeted.

Thompson’s attorney claims that Thompson was a paid advertiser of the stock, not a broker, and had attorneys review disclaimers in the emails that plainly stated he had been compensated to promote the stocks. Thompson’s attorney stated, “It’s advertising. You might as well indict ‘Mad Men,’ if they actually existed.”

Thompson was released on $1 million bond and settled charges arising from a 2012 SEC case in Florida. One of Thompson’s co-defendants in that case was described by Thompson’s attorney as the ringleader of the operation and is working with New York prosecutors. “We’ve done nothing wrong,” she said.

If you or someone you know has lost money as a result of an investment or Ponzi scheme, please contact Richard Frankowski at 888-741-7503 to discuss your potential legal remedies or complete the contact form.