What's up guys and welcome back to wall street millennial on this channel, we cover everything related to stocks and investing. As you know, fraud is perpetrated in financial markets on a daily basis, causing losses of hundreds of millions or even billions of dollars. Each year, the majority of them are probably never uncovered, sometimes they're, even carried out by large, respected institutions such as bulge bracket investment banks. The strategies used can take many forms from insider trading and promotional pump and dump schemes to spoofing and quote stuffing.

One of the most common strategies is the pump and dump in part, because it can so easily be done by a small group of people with a little bit of capital and big ambitions to defraud pump and dub schemes can be done on a large scale. But they are rampant in the area of small stocks, in particular, penny stocks and otc stocks are the wild west for pumping up schemes targeting unsuspecting investors in today's video. We're going to take a look at a recent pump and dump scan that involved, the perpetrator, controlling 98 of the free flow of a public company and then marketing the stock using mass call, centers and email promo spamming as a result of the scam. The perpetrator made.

9 million dollars of illicit proceeds in conjunction with a company insider who was helping with the scam. He used multiple third-party agencies to promote the microcap stock and coordinated his own selling of the stock trade for trade with investors that he had duped in this video. We'll take a look at what he did, how much money he made from the scheme and what happened to him and his victims. The perpetrator of this fraud is a california resident who goes by the name, charlie abujadah.

His fraud started around august of 2019 and mainly involved the stock of a micro cap company called odyssey group international odyssey group international is a tiny company by any standards incorporated in 2014 and originally having a stock worth just 147 000 in 2019. Abuja purchased two and a half million shares of the company from one of the original shareholders for just four cents per share. The shares were not restricted and thus could be freely traded. Despite the fact that the company was so small that no one else had ever traded an appreciable amount of the stock abuja deposited his shares into a brokerage account and started trying to sell them on the open market, since he was the only one trading the stock.

He controlled the vast majority of the stock's free flow 98. Very few people in the world had ever even heard of the company at the time, so there was essentially no trading activity in the stock at all. But abuja wanted to change that in early 2020, abuja hired a call center to perpetrate his scam by cold calling unsophisticated investors. One of the first victims was an investor who held a six-figure retirement account in a company directed 401k in his retirement account.

His employer manages investments mainly in diversified mutual funds. The budgetless call center called this investor and convinced him to roll over his 401k into a separate self-directed ira account. They then successfully convinced him to sell all of his diversified mutual funds and use the proceeds to buy odyssey stock. They continued to contact the investor by phone text and email for months.

After each time the investor bought odyssey stock. They would say things like congrats. Your order was filled, it looks like sometimes this one investor would account for 97 of all trading activity in odyssey stock. In a single day, most of the traits would be bought at the direction of abuja's people at very specific times and prices, so that abuja could keep a close grip on where every single share of odyssey stock was trading.

In the end, the vast majority of the stock that this investor bought was directly sold by abuja for prices ranging from two dollars to two dollars and thirty cents per share. Keep in mind that fujita had originally bought those shares for about four cents each. In order to convince the investor that he should be buying odyssey stock, they made grand promises to him, saying that the stock would skyrocket within months and that his investment portfolio would double. But after about a month with nothing happening to the stock price, the investors started to get suspicious.

He told the company several times to calm his doubts and was able to speak to one person who claimed to be a founder. This person was in fact, intimately involved in the company and spoke to the ceo regularly, but he was also in close contact with abuja and, in fact, was being paid hundreds of thousands of dollars by abuja for quote marketing and consulting services. Unquote, he was able to help quell some of the investors, doubts as to the odyssey investment, at least for a while, but eventually that investor ended up losing tens of thousands of dollars on the investment. At some point, in february of 2020, abuja became impatient with the lack of buying pressure on odyssey stock and fired the call center.

He then hired a different, more extensive call center in colombia that was supposedly more capable. He expected the new call center to generate half a million shares of buying activity in stock per week after getting started or 100 000 shares per day for comparison. At that time, the total number of shares of aussie that had traded altogether was only 9 000 going back 3 years. The new call center scheme was to primarily use email to promote the stock.

They planned to first get a few dozen investors to start. Looking at the stock and then pump up the price, a few percent to make them think the stock was good. Then the investors would put more money into the stock, but since abuja controlled the majority of the free flow that would push the stock price higher. This would make the investors think that the stock was a real winner and put in big money and eventually abruccio would be able to sell out of his entire two and a half million share position in the company for a favorable price.

But it wasn't just abuja. Does two and a half million shares? He also had other affiliates that had additional millions of shares that he wanted to dump on the market. So that meant that the promotional campaign would have to be highly effective in the email blasts that were prepared for the campaign. Highly promotional lines were used, such as quote way to capitalize on the trillion dollar health care sector.

Unquote, they included lofty promises of the businesses prospects, such as saying that aussie had a partnership with another company that could quote quite possibly facilitate the release of the first. Ever concussion treatment drug, which would be an immense feat in the untouched market. Unquote, they also did not disclose that a vigil was funding. The promotions was connected to people within the company and had a position in the song that he could possibly sell before the first email promotions began.

Abuja bought and sold hundreds of shares of odyssey, essentially with himself giving the false illusion that there was any trading activity in the stock at all. Besides that, there is essentially no trading activity on the day he made those trades. For example, there was exactly zero other trading activity in the stock, but after the first day of the email promotion, he was able to sell more than 20 000 shares over the course of the next several weeks. In march, multiple other email blasts were sent out with.

Similarly, promotional text, as a result, abuja, was able to sell hundreds of thousands of shares of odyssey, eventually able to liquidate his entire position over the course of the campaign. Despite his aggressive selling, the fraudulent promotions were able to prop up the stock price of odyssey. In the end, he was able to sell almost all of his shares above 70 cents per share, many of them above two dollars per share. Compare that to the fourth cents, a share that he paid for the stock abuja also ran similar pump and dump schemes for other stocks, which he also owned.

The vast majority of their free floats for one stock scepter holdings inc ran promotions that were even more blatant. The text of the promotion said things like that: the stock had shifted into a parabolic state and the massive short squeeze opportunity could send the shares past 14 cents. At any moment, they did have a disclaimer at the bottom of the emails. Saying quote: we do not own any shares in brzl, we have been compensated: 35 000 cash via bank wire by a third party; quantum capital llc to conduct investor relations, advertising and marketing for brzl, the third party profiled company, or their affiliates likely wish to liquidate shares Of the profile company at or near the time you received this communication, which has the potential to hurt, share prices unquote.

However, the only problem was that the disclaimer was written in white text on a white background, so it could only be seen if the reader were to highlight the text or otherwise change the color of the text. All in all, abuja and his affiliates made close to 10 million dollars by pumping these stocks and dumping them onto the duped investors. The sec, with the assistance of the fbi, was able to catch him and charge him in july of 2021.. It turns out that the second stock promoter that abuja hired after firing the first one, was a cooperating witness working with the fbi through the cooperating witness.

The fbi was able to gather evidence of abuja's true scheme through his conversations with a cooperating witness. It's a good thing that they caught him, otherwise he may have continued tricking unsuspecting investors out of many more millions of dollars of their hard-earned money. This case is another example of why you should always be suspicious of unsolicited promotional materials advocating a stock, especially microcap stocks. Whenever a stock's price could be moved by just a few investors after receiving a stock pitch, that is prime area for a pump and dump, and these pump and dumps happen all the time.

Alright guys that wraps it up for this video, if you enjoyed the content, make sure to hit that like button and subscribe for future videos also leave a comment saying what you think about this scammer in the meantime. Thank you so much for watching and we'll see in the next video wall street millennial signing out.