Federal Grand Jury Indicts Former Social Media Stock Promoter in a ‘Pump-and-Dump’ Securities Fraud Scheme

LOS ANGELES – A federal grand jury has returned an indictment charging a San Pedro man in a “stock scalping” scheme in which he used his “TeamBillionaire” email list and his social-media accounts to deceive investors into buying penny stocks he recommended, while simultaneously selling off those same stocks for a profit.

Michael M. Beck, 48, was charged in an indictment returned Tuesday afternoon with three counts of securities fraud and three counts of wire fraud, each of which carries a statutory maximum penalty of 20 years in federal prison.

The indictment alleges that Beck purchased blocks of penny stocks and then promoted those stocks to his many followers on the social-media platform then-known as Twitter. Prior to promoting the stocks to the followers of the @BigMoneyMike6 handle on Twitter, Beck encouraged subscribers of his TeamBillionaire email group to buy the stock, thereby increasing the trading volume of the stock and making the stock look more attractive to potential investors. At the same time, Beck was secretly selling – or causing his associates to sell – shares of the very stock he was promoting into the artificially inflated market for a profit, often while falsely telling his Twitter followers that he was still buying shares.

Investigators believe that Beck’s fraudulent scheme resulted in profits of at least $500,000.

The United States Securities and Exchange Commission previously filed a civil complaint alleging that Beck committed violations of federal securities law.

An indictment is merely an allegation. The defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Beck is scheduled to make his initial court appearance on the indictment on January 9.

IRS Criminal Investigation is investigating the case.

Assistant United States Attorneys Carolyn S. Small and Jenna Williams of the Corporate and Securities Fraud Strike Force are prosecuting this case.

Created in October, the Corporate and Securities Fraud Strike Force is focusing on complex corporate crimes, abuses by company insiders and offenses that impact the nation’s financial system.