July 17, 2015

Canadian Citizen Pleads Guilty to Leading an International Fraud Scheme

Earlier today, Sandy Winick pleaded guilty at the federal courthouse in Brooklyn, New York, to conspiring to commit wire fraud for running an international advance fee scheme. According to court filings and facts presented during the plea proceeding, Winick was the leader of the multi-million-dollar scheme, which used call centers around the world to defraud victims. Winick, a Canadian citizen, was extradited from Thailand to face charges here.

The guilty plea was announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York and Diego Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI).

In announcing the guilty plea, Mr. Currie extended his grateful appreciation to the FBI, which led the government’s investigation, and thanked the Internal Revenue Service, Criminal Investigation, New York; Homeland Security Investigations, Department of Homeland Security, Buffalo; Treasury Inspector General for Tax Administration; and the Royal Canadian Mounted Police and law enforcement authorities in England, Thailand, and China for their assistance.

Winick is the seventh defendant to plead guilty in this case to date. Nine defendants were charged in two related schemes that Winick led from 2008 through 2013. In the first scheme, several defendants, including Winick, were charged with engaging in an international “pump and dump” operation, fraudulently inflating the share price of worthless penny stocks, and then dumping billions of shares on unsuspecting victim investors across the globe. In the second scheme, the defendants, including Winick, were charged with operating boiler rooms in four countries, inducing investors in penny stocks, including many of the victims in the first scheme, to pay advance fees that the defendants promised would enable them to sell the stocks and recover any losses they incurred. In reality, Winick and his co-conspirators simply stole the fees without providing any services, fraudulently extracting more than five million dollars from their victims. As part of this scheme, Winick established and operated -2- boiler rooms or call centers in various locations around the world, including Canada, Thailand, and China, to solicit fees from the victims. Winick also planned to open a call center in Brooklyn.

When sentenced by United States District Judge Eric N. Vitaliano, Winick faces a maximum sentence of 20 years. This prosecution was the result of efforts by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ Offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets, and conducting outreach to the public, victims, financial institutions, and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, visit http://www.StopFraud.gov.

The government’s case is being prosecuted by the Office’s Business and Security Fraud Section. Assistant United States Attorneys Christopher A. Ott and Sylvia Shweder are in charge of the prosecution, with assistance provided by Assistant United States Attorney Melanie Hendry of the Office’s Civil Division, which is responsible for the forfeiture of assets.

The Defendant:

Citizenship: Canada
Age: 57 Ontario, Canada