Former Investment Banker and Registered Broker Pleads Guilty to Cryptocurrency Investment Fraud Scheme
Earlier today, Sandy Winick, a Canadian citizen who was extradited from Thailand, was sentenced at the federal courthouse in Brooklyn, New York, to 78 months in prison following his July 2015 guilty plea to conspiring to commit wire fraud for running an international advance fee scheme. The sentencing proceeding was held before United States District Judge Eric N. Vitaliano. As part of the sentence, Winick was ordered to pay $2,431,038.32 in restitution and $5,000,000 in forfeiture.
The sentence was announced by Robert L. Capers, United States Attorney for the Eastern District of New York. Mr. Capers thanked the Federal Bureau of Investigation, New York Field Office (FBI); the Internal Revenue Service, Criminal Investigation, New York (IRS); U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI), Buffalo; Treasury Inspector General for Tax Administration (TIGTA); the Justice Department’s Office of International Affairs (OIA); the Royal Canadian Mounted Police (RCMP); the United Kingdom’s National Crime Agency (NCA); and law enforcement authorities in Thailand and China for their significant cooperation and assistance in this complex global investigation.
According to the indictment and other court filings, between 2008 and 2013, Winick was the leader of two multi-million dollar fraud schemes that used call centers around the world to defraud unsuspecting investors. In the first scheme, Winick, together with other defendants, was charged with engaging in an international “pump and dump” operation. Specifically, Winick and his co-defendants secretly controlled and fraudulently inflated the share price of worthless penny stocks through false and misleading press releases and manipulative trading and then sold billions of the fraudulently-inflated shares to investors across the globe. In the second scheme, Winick, together with other defendants, was charged with operating boiler rooms in four countries to induce investments in penny stocks, including investments by many of the victims in the first scheme, to pay advance fees that the defendants promised would enable them to sell the stocks and recover any losses they incurred. In reality, Winick and his co-defendants stole more than $5 million from the duped investors and never provided any services. Winick established and operated boiler rooms or call centers in various locations around the world, including Canada, Thailand, and China, to solicit fees from the victims. Winick also planned to open a call center in Brooklyn.
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The government’s case is being prosecuted by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys Christopher A. Ott and Sylvia Shweder are in charge of the prosecution, with assistance provided by Assistant United States Attorney Melanie Hendry of the Office’s Civil Division, which is responsible for the forfeiture of assets.
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This prosecution was the result of efforts by President Obama’s Financial Fraud Enforcement Task Force which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ Offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets, and conducting outreach to the public, victims, financial institutions, and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, visit http://www.StopFraud.gov.
E.D.N.Y. Docket No. 13-CR-452 (S-2) (ENV)