A federal grand jury in the Southern District of Texas indicted eight men with conspiracy to commit securities fraud for a long-running, social media-based "pump and dump" scheme. The indictments come a day after the US Securities & Exchange Commission civilly charged them with similar violations.

The indictment alleges the group, which collectively had t over 1.5 million followers on Twitter, to whom they allegedly disseminated false and misleading information. The defendants also allegedly ran an online community for individual stock traders called Atlas Trading. 

According to court documents, Edward Constantinescu, aka Constantin, 38, of Montgomery, Texas; Perry "PJ" Matlock, 38, of The Woodlands, Texas; John Rybarczyk, 32, of Spring, Texas; Gary Deel, 28, of Beverly Hills, California; Stefan Hrvatin, 35, of Miami, Florida; Tom Cooperman, 34, of Beverly Hills, California; Mitchell Hennessey, 23, of Hoboken, New Jersey; and, Dan Knight, 23, of Houston, Texas, allegedly engaged in a wide-ranging securities fraud conspiracy in which the defendants used their extensive social media presence on Twitter and Discord to "hype interest in particular securities by posting false and misleading information to "pump" the prices of those securities while concealing their intent to later "dump" their shares by selling them at the artificially inflated prices. From in or around January 2020 to in or around April 2022, the defendants profited at least approximately $114 million from their scheme."

All defendants are charged with one count of conspiracy to commit securities fraud. Additionally, Constantin is charged with three counts of securities fraud and one count of engaging in monetary transactions in property derived from specified unlawful activity; Matlock and Deel are both charged with five counts of securities fraud; Rybarczyk is charged with four counts of securities fraud; and Hrvatin, Cooperman, and Hennessey are each charged with two counts of securities fraud.

The defendants made their initial court appearances yesterday. If convicted, each defendant faces a maximum penalty of 25 years in prison for conspiracy to commit securities fraud and each charged count of securities fraud. Constantin also faces a maximum penalty of 10 years in prison if convicted of engaging in unlawful monetary transactions. A federal district court judge will determine any sentence after considering the US Sentencing Guidelines and other statutory factors.

"Financial crimes like securities fraud may not be violent, but they certainly are not victimless," said Special Agent in Charge James Smith. "The eight individuals arrested today are accused of costing investors, specifically their social media followers who trusted them, millions of dollars by a 'pump and dump market manipulation scheme they allegedly carried out on popular social media platforms," authorities concluded.

Or, as one defendant exclaimed to another during a wiretapped phone call, "we're robbing f*cking idiots of their money."