Indian gets jail term for brokerage fraud in USApril 28th, 2010 - 11:07 am ICT by IANS
By Arun Kumar
Washington, April 28 (IANS) An Indian national has been sentenced to 81 months in prison for his alleged role in an international fraud scheme to “hack, pump and dump” online brokerage accounts in the US.
Jaisankar Marimuthu, 36, a native of Chennai, who was extradited to the US following his arrest in Hong Kong, was also ordered Tuesday to pay $2.4 million in restitution by US District Judge Laurie Smith Camp in Nebraska.
Marimuthu pleaded guilty Feb 5 to one count of conspiracy to commit wire fraud, securities fraud, computer fraud and aggravated identity theft, and to one count of aggravated identity theft before US District Magistrate Judge F.A. Gossett III in Omaha, Nebraska.
According to court documents, Marimuthu was part of a conspiracy that operated out of Thailand and India from February 2006 through December 2006 in which the prices of thinly-traded securities were fraudulently inflated by hacking into brokerage accounts in the US.
The accounts were then illegally used to make large, unauthorised purchases of securities in the name of the unsuspecting customers.
Marimuthu admitted that after the price of the securities had been artificially increased or “pumped up” through the bogus trading, the conspirators’ own holdings of the securities would be sold at a profit.
More than 90 customers and seven brokerage firms in the US have been identified as victims. Financial losses of close to $2.5 million were sustained by the victims in this case.
Co-defendant Thirugnanam Ramanathan, 37, pleaded guilty June 2, 2008, to one count of conspiracy to commit wire fraud, securities fraud, computer fraud and aggravated identity theft.
Following his arrest in Hong Kong, Ramanathan was extradited on May 25, 2007, to the US. Ramanathan was sentenced to two years in prison by Judge Camp, and has since been returned to India following completion of his sentence.
Co-defendant Chockalingham Ramanathan, 36, was charged with one count of conspiracy, eight counts of computer fraud, six counts of wire fraud, two counts of securities fraud and six counts of aggravated identity theft. Chockalingham Ramanathan remains at large.
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Tags: arun kumar, brokerage firms, brokerage fraud, case co, computer fraud, conspirators, district magistrate, financial losses, fraud scheme, gossett, international fraud, jail term, laurie smith camp, magistrate judge, omaha nebraska, online brokerage accounts, ramanathan, securities fraud, unsuspecting customers, wire fraud