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NEWARK, N.J. (AP) — Two men were charged Monday with running a securities fraud scheme that investigators say netted them more than $26 million in illegal profits.
Joseph Taub, 37, of Clifton, and 21-year-old Elazar Shmalo, 21, of Passaic, were arrested Monday, federal prosecutors announced. The Securities and Exchange Commission also filed civil charges against the men.
Attorneys listed for the men did not immediately return calls seeking comment on their behalf. Both men made initial court appearances and were released on bail. They were barred from trading in securities on others' accounts as a condition of their release.
The men used dozens of brokerage accounts to drive up the cost of $10 billion worth of securities and then sold securities they owned at inflated prices, investigators said. They used at least one account to make multiple small orders to get a stock to go up or down and then used another account to buy and sell larger quantities of stock to make money, investigators said.
Some of the accounts were listed in the names of family members or in the names of people not involved in an attempt by Taub to conceal the scheme, investigators said.
The charges carry a maximum penalty of five years in prison plus fines. The SEC filing seeks a return of money made illegally plus interest and penalties.
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