Cyber Scam Used Fake Financial Firm Websites to Trick Investors
The Securities and Exchange Commission recently announced that it had brought charges against major fraudster, Denis Georgiyevich Sotnikov for his role in a $26 million investment scam.
According to the SEC, Sotnikov defrauded investors by luring them into purchasing fake Certificates of Deposit (CDs) which he sold through phony websites that mimic actual legitimate financial institution websites. A perfect example of the sophistication (not to mention deviousness) of today’s cyber criminals, Sotnikov used internet ads to target investors looking for high-yield CDs. Once the unwitting investors clicked through on the ads, they were taken to phony websites that looked convincing enough and even claimed that they were members of financial regulatory agencies and organizations such as FINRA and the FDIC.
Fake Financial Firm Websites Lead to Fake Account Executives and Fake Clearing Firms
The scheme went even further. If an investor were to call the numbers on the phony websites, they would be channeled through to an “account executive” who would impersonate a real registered representative. The account exec would then instruct investors to wire funds to a fake “clearing partner.” These partners were in fact entities set up by Mr. Sotnikov to launder and misappropriate investor funds.
The scam had been in operation since 2014, and involved more than 24 websites that spoofed actual financial firms. Losses to investors — many of whom were older and who wired the scam artist their retirement savings — total an estimated $26 million.
SEC Take Down Includes Ringleader and Numerous Shady Business Entities
The SEC’s complaint, filed in federal court in the District of New Jersey, charges Sotnikov, Adaptive Technology LLC, AGQ Business Group LLC, ATL Business Group LLC, BO&SA Corp., DN Industrial LLC, and Expert Digital LLC with violating the antifraud provisions of the federal securities laws and Sotnikov with aiding and abetting those violations. The SEC seeks permanent injunctive relief and the return of allegedly ill-gotten gains with prejudgment interest and penalties. The complaint also names Sotnikov’s wife Natalia Mazitova as well as Great Imperial LLC, HRC Clearing House LLC, and Inteko Cargo LLC as relief defendants.
