By Bernard Vaughan
NEW YORK (Reuters) - Federal prosecutors on Tuesday said they have made arrests in an international penny stock scheme that involved fraudulently inflating shares prices and trading volumes.
The fraud generated more than $140 million through various brokerage and bank accounts, according to a statement from the office of U.S. Attorney Loretta Lynch in Brooklyn. A press conference is scheduled for 11 a.m. EDT.
Two people, Joseph Manfredonia, 45, of New Jersey, and Cort Poyner, 44, of Florida, were arrested on Tuesday morning, according to Peter Donald, an FBI spokesman.
A superseding indictment filed earlier this month also names four Canadians and three other U.S. citizens allegedly involved in the scheme.
The scheme involved fraudulently inflating share prices and trading volumes of certain penny stocks. The defendants also operated a so-called advance fee scheme, making false promises to investors to induce them to pay fees for non-existent services to sell their illiquid penny stock shares, according to the indictment.
(Reporting by Bernard Vaughan; Editing by Jeffrey Benkoe)