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9 charged in $140M NY fraud case

Tom Hays, Associated Press

NEW YORK (AP) -- Federal authorities in New York say nine people have been charged in a $140 million penny stock fraud investigation.

U.S. Attorney Loretta Lynch announced the charges Tuesday. She says the international scheme is believed to be one of the largest penny stock frauds in history.

An indictment accuses the defendants of artificially inflating the value of worthless penny stocks and selling them to investors across the globe.

They also allegedly tricked the victims into paying to join phony lawsuits to recoup their losses.

FBI agents arrested six of the defendants Tuesday in New York, Arizona, New Jersey, Florida and California. A seventh is being held in Canada and two are at large.