Social networking sites aid US fraud

Oct 06, 2010 |

Reuters

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Oct. 6: Social networking sites Facebook and Twitter were used to tout stocks in a classic “pump and dump” fraud of about $7 million that was uncovered during a cocaine-trafficking probe, US prosecutors said on Tuesday.

Investigators discovered the fraud in a two-year probe of suspected trafficking by longshoremen and others of 1.3 tonnes of cocaine worth $34 million through the Port of New York and New Jersey officials said.

A statement by the Manhattan US Attorney’s office said 11 out of 22 people charged used more than 15 websites, Facebook pages, and Twitter “feeds” to “defraud the investing public into purchasing stocks that were being manipulated by participants in the conspiracy.”

A spokeswoman for Twitter declined to comment on the announcement. A spokesman for Facebook declined to comment. Eight longshoremen and three others face narcotics trafficking charges. Eleven people, including one longshoreman, face charges of conspiracy to commit wire fraud in the purported stocks scheme. Documents suggest that 11 were from New York, Florida and Pennsylvania. They face up to 20 years in prison if convicted.

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