KUALA LUMPUR (March 22): Five Malaysians and two Taiwanese have been criminally charged in the US for alleged roles in a ‘pump-and-dump’ investment fraud scheme involving Nasdaq-listed China Liberal Education Holdings Ltd (CLEU) that resulted in the US government’s seizure of US$214 million (RM946 million).

According to a statement by the US Attorney’s Office for the Northern District of Illinois dated March 21 which cited papers filed with the US District Court in Chicago, the accused Malaysians are Cedric Lim Xiang Jie, 50; Chai Ko Sen, 57; Wong King Sung, 39; Vun Siong Wee, 37; and Wong Kok Wah, 56. They are charged alongside Ma Chien Lung, 54, and Cheng Ming-Shen, 36, of Taiwan.

All seven accused are currently at large, and warrants have been issued for their arrest.

The indictment alleges that the group had individuals based in China posing as US-based licensed investment advisers on social media and messaging platforms to deceive investors with false promises of significant returns from investing in CLEU, a Cayman Islands incorporated company “that purported to provide educational services in China”.

“The misleading promotion and coordinated trading caused the stock price to artificially rise, at which point the defendants sold thousands of shares and made millions of dollars in profits,” the indictment stated. “The stock price ultimately decreased significantly, at the expense of other investors, some of whom lost almost the entirety of their investment.”

The scheme unfolded between November 2024 and January 2025, culminating in a 99% drop in share price after the company disclosed a significant increase in outstanding shares.

US authorities have seized approximately US$214 million in alleged proceeds and are seeking permanent forfeiture of the funds to the US to allow money to be returned to victim investors.

If convicted, the defendants face up to 25 years in prison for each securities fraud charge and up to 20 years for each wire fraud charge.

“The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt,” the statement read, asking that those victimised by the fraud scheme charged in the indictment to notify the FBI at 1800 225 5324.

The indictment and forfeiture complaint were announced by Acting US Attorney for the Northern District of Illinois Morris Pasqual and FBI Chicago Field Office Special Agent-in-Charge Douglas S DePodesta. "Valuable assistance was provided by the Boston Regional Office of the US Securities and Exchange Commission and the SEC’s Office of Inspector General," the statement read.  Assistant US Attorney Jared Hasten represents the US government.