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A strip mall mogul accused of running a botched scheme to manipulate the price of WeWork Inc. shares was arrested on fraud charges over what prosecutors called a phony $77 million tender offer, Bloomberg News reported. Jonathan M. Larmore, of Punta Gorda, Flo., was taken into custody yesterday and was scheduled to appear before a magistrate judge in Fort Myers in the afternoon. He announced the fake offer late last year, shortly before the co-working company filed for bankruptcy, to manipulate its stock price, according to a statement by Manhattan U.S. Attorney Damian Williams. News of the offer led investors to buy WeWork stock at inflated prices during after-hours trading, as Larmore tried to drive up the value of his WeWork call options and shares, according to the U.S. But he mistimed his announcement of the false offer, prosecutors say, and his options were worthless. The case is the latest example of criminal charges over alleged attempts to manipulate stock through fake tender offers, which can spike the shares and bring traders a fast profit. In 2018 a Virginia man was sentenced to two years in prison for a scheme to manipulate securities of Fitbit Inc. In 2016 a Bulgarian man was arrested and charged on US claims that he used fake tender offers to rig the market for Rocky Mountain Chocolate Factory Inc. and Avon Products Inc.

The Securities and Exchange Commission (SEC) charged 17 people for their alleged roles in a $300 million Ponzi scheme that targeted more than 40,000 predominantly Latino investors, according to a complaint filed yesterday in federal court in Houston, The Hill reported. The complaint follows the SEC’s emergency action in September 2022 that halted the company accused of carrying out the scheme, CryptoFX, and charged the two alleged main actors involved, Mauricio Chavez and Giorgio Benvenuto. Since 2022, the SEC has continued the investigation to identify more individuals involved in the alleged scheme. “We allege that CryptoFX was a $300 million Ponzi scheme that targeted Latino investors with promises of financial freedom and life-altering wealth from ‘risk free’ and ‘guaranteed’ crypto and foreign exchange investments,” Gurbir Grewal, director of the SEC’s division of enforcement, said in a statement. According to the complaint, filed in the Southern District of Texas, the 17 defendants acted as “leaders” of the CryptoFX network. They allegedly raised $300 million from predominantly Latino investors and promised returns of 15 to 100 percent on their investments. The SEC alleges that the defendants mostly did not use the funds for trading purposes, as they claimed to investors. The defendants instead used the funds to pay off supposed returns to other investors, to pay themselves commissions and bonuses and to “fund their own lifestyles,” according to the SEC’s complaint.

The mystique of Jay Peak, the northernmost ski area in Vermont, is intimately bound to the Jay Cloud, a mythical storm cloud that hovers over its rocky summit. The resort, five miles from Quebec, claims to receive more snow — an average of about 350 inches — than any resort east of the American Rockies, and even more than many Western ski areas, including Park City, Utah, and Steamboat Springs, Colo. But another cloud, for years, hung over Jay Peak Resort: Its former owners perpetrated the biggest financial fraud in ski industry history — as well as the biggest fraud in the state of Vermont, the New York Times reported. In 2016, officials from the Securities and Exchange Commission seized the ski resort and accused its owners, the longtime Jay Peak president, Bill Stenger, and a Miami businessman named Ariel Quiros, of defrauding foreign investors of $200 million in a Ponzi-like scheme. Both men landed in jail. The ski area remained open while under federal receivership, emerging from it in the fall 2022 when the area was purchased by the Park City-based Pacific Group Resorts for $76 million.

The former chief executive of Firestar Diamond, a jewelry wholesaler accused of taking part in bank fraud allegedly orchestrated by Nirav Modi, transferred his interest in a multimillion-dollar New York residence to his wife days after his company filed for bankruptcy in 2018, the trustee responsible for liquidating Firestar said in a lawsuit seeking to undo the transfer, WSJ Pro Bankruptcy reported. Mihir Bhansali made the transfer to place his interest in the residence, which had been purchased for $7.1 million, “outside the reach of his present and future creditors,” Richard Levin, the trustee working to distribute Firestar’s remaining assets, said in a lawsuit filed Monday in the U.S. Bankruptcy Court in the Southern District of New York. It is the third lawsuit lodged by the Firestar trustee against Bhansali, whom Levin said participated in the Indian bank fraud allegedly orchestrated by jewelry magnate Modi. Levin said in his new lawsuit that the residence in New York was bought partly with cash from the alleged Modi scheme. Levin said that Modi was found living in London in 2019 and arrested. In 2021, after a trial, the U.K. granted India’s request to extradite him, but Modi appealed the extradition ruling, and he remains in prison in London, Levin said.

Lawyers for biopharmaceutical company Sorrento Therapeutics disputed allegations that they committed bankruptcy fraud, saying that a bank account and mailbox created in Texas justified a chapter 11 filing in the state days later, WSJ Pro Bankruptcy reported. The U.S. Justice Department’s bankruptcy watchdog alleged last week that the bankruptcy filed in Houston by Sorrento subsidiary Scintilla Pharmaceuticals in February 2023 falsely represented that its principal assets and business are in Texas when it is actually based in San Diego. A Sorrento shareholder had separately made allegations in court that the company’s lawyers committed fraud by filing the case in Texas. San Diego-based Sorrento had used Scintilla’s chapter 11 petition in the U.S. Bankruptcy Court in Houston as the basis to file its own petition in that court. The U.S. trustee for the Southern District of Texas said that the Sorrento and Scintilla cases should either be dismissed or transferred out of state, noting that Scintilla is a Delaware-incorporated company that made repeated representations to the California secretary of state in June 2023 that its principal address was in San Diego.

Disgraced cryptocurrency entrepreneur Do Kwon should be extradited to the U.S. to face trial on fraud charges, rather than to his native South Korea, a court in the tiny Balkan country of Montenegro has ruled, the Wall Street Journal reported. Kwon’s lawyers have three days to appeal the ruling by the High Court in the Montenegrin capital of Podgorica, a spokeswoman for the court said Wednesday. The appeals court will have the final word in the case, she added. A local lawyer for Kwon, Goran Rodić, called the ruling illegal and pledged to appeal. Kwon, the creator of the failed TerraUSD and Luna cryptocurrencies, has previously denied committing fraud. Kwon has been at the center of a tug of war between the U.S. and South Korea ever since he was arrested in March 2023 at the Podgorica airport while attempting to board a private jet to Dubai with a fake Costa Rican passport. Both the U.S. and South Korea have sought to prosecute him on charges stemming from the May 2022 collapse of TerraUSD and Luna. The crash erased some $40 billion in value from the crypto markets, hurt thousands of investors worldwide and triggered a chain reaction that caused other digital-currency firms to topple into bankruptcy. Last year, federal prosecutors in New York charged Kwon with eight criminal counts of fraud. The Justice Department alleged that Kwon misled investors about the stability of TerraUSD, an algorithmic stablecoin that used financial engineering to maintain a value of $1 a coin. A Stanford University-educated entrepreneur, Kwon had hyped TerraUSD as the future of money and derided critics who called it potentially unstable. The Securities and Exchange Commission has also sued Kwon and his company, Terraform Labs, over securities fraud in a civil case stemming from the TerraUSD and Luna collapse. Lawyers for Terraform Labs have denied the SEC’s allegations. Read more. (Subscription required.)