The U.S. Department of Justice unsealed an indictment in the Eastern District of Virginia charging Lai Kui Sen, co-CEO of Ostin Technology Group Co. Ltd. (OST), and financial advisor Yan Zhao with conspiracy to commit securities fraud and wire fraud, securities fraud, and wire fraud in an alleged scheme targeting U.S. retail investors. Prosecutors allege the operation generated more than USD 100 million for the defendants and their co-conspirators, and that nearly USD 10 million in assets has already been seized from co-conspirators’ accounts. According to the indictment, the defendants and others allegedly provided a group of 15 co-conspirators with tens of millions of OST shares through two non-bona fide securities transactions, including one in which co-conspirators paid nothing for more than 70 million shares. A coordinated campaign to inflate OST’s share price and trading volume allegedly began on 15 April 2025 and ran through June 2025, including impersonating real investment advisors and promoting the stock on social media to create a false impression of buying momentum; Sen and Zhao allegedly facilitated brokerage accounts and orchestrated the sale of heavily discounted or free shares, generating profits of more than USD 110 million. The indictment alleges that on 26 June 2025, OST lost over USD 950 million in market capitalization, representing more than 94% of its value, leaving unwitting investors with significant losses. If convicted, the defendants face maximum penalties of 20 years’ imprisonment for conspiracy and wire fraud, 25 years for Title 18 securities fraud, and 20 years for Title 15 securities fraud. The Federal Bureau of Investigation and the SEC Office of Inspector General investigated the case, with the matter referred by FINRA’s Surveillance and Market Intelligence – Market Abuse Group; the indictment remains an allegation and the defendants are presumed innocent until proven guilty.
U.S. Department of Justice 2025-09-12
U.S. Department of Justice indicts Ostin Technology Group co-CEO and financial advisor over alleged $100 million pump-and-dump scheme
The U.S. Department of Justice unsealed an indictment against Lai Kui Sen and Yan Zhao for conspiracy to commit securities and wire fraud, allegedly generating over USD 100 million through a scheme targeting U.S. retail investors. They allegedly manipulated Ostin Technology Group Co. Ltd.'s share price, resulting in a USD 950 million market cap loss. The case, investigated by the FBI and SEC, was referred by FINRA, with defendants facing up to 25 years' imprisonment if convicted.