3 days ago
US court approves RM950m forfeiture in alleged stock scam involving five Malaysians; landmark recovery for FBI
KUALA LUMPUR, May 29 — A US court has approved the forfeiture of approximately US$214 million (RM950 million) linked to an alleged 'pump-and-dump' fraud scheme involving seven individuals, including five Malaysians.
According to a statement by the US Attorney's Office yesterday, the funds — seized during an investigation led by the Federal Bureau of Investigation (FBI) — will be returned to confirmed victims of the scheme.
'The large forfeiture order of more than $200 million should serve as a warning that federal law enforcement will aggressively pursue fraudulent profits from those who seek to prey upon investors by manipulating the US stock market,' read the statement
'Despite the overwhelming manipulation as alleged in this case, this serves as one of the premier FBI investigations in which the federal government was able to successfully recover victims' hard-earned money before it disappeared into overseas bank accounts,' it added.
The alleged fraud, which occurred between November 2024 and February 2025, involved misleading promotions and coordinated trading of shares in China Liberal Education Holdings, causing prices to spike before the defendants allegedly sold off their shares for profit.
US authorities said many investors, misled by false claims shared via social media and messaging apps, suffered significant losses when the stock's value later collapsed.
The motion to forfeit the funds was granted on Tuesday, by US district judge Jorge L Alonso.
The seven accused — five Malaysians, namely Lim Xiang Jie, Ko Sen Chai, King Sung Wong, Siong Wee Vun and Kok Wah Wong, and two Taiwanese nationals — remain at large, with arrest warrants issued.
To note, 'pump and dump' scheme involves fraudsters spreading false or misleading information — often online — to inflate a stock's price so they can sell their shares at a profit.
Once the price crashes, unsuspecting investors who bought in at the peak are left with significant losses.
