Public Company Officers Plead Guilty to International Securities Fraud Conspiracies

ATLANTA - Zoltan Nagy, a Canadian businessman, and Glenn Laken, an Illinois trader previously convicted of federal securities fraud and racketeering offenses, have pleaded guilty to conspiring to commit securities fraud in connection with international pump-and-dump schemes that resulted in over $1 million in losses. Three Canadian co-conspirators, Phillip Sewell, Richard Tang, and Davies Wong, previously pleaded guilty to similar charges.

"These defendants engaged in sophisticated stock price manipulation that harmed investors and undermined confidence in the market," said U.S. Attorney Theodore S. Hertzberg. "With the assistance of our partners in law enforcement and at the Securities and Exchange Commission, we will continue to aggressively root out and prosecute criminals who perpetrate securities fraud."

"These defendants manipulated the stock market for their own financial gain, exploiting investors and compromising the security of brokerage accounts to carry out their schemes," said Marlo Graham, Special Agent in Charge of FBI Atlanta. "These guilty pleas underscore the FBI's commitment to working with our law enforcement partners to investigate complex financial crimes, hold those responsible accountable, and protect the integrity of our financial markets."

According to U.S. Attorney Hertzberg, the indictment, and other information presented in court: Nagy and Laken were the majority shareholders of two different publicly traded penny stock companies at the heart of separate, but substantially similar, pump-and-dump schemes. Both schemes involved hacking U.S.-based online consumer brokerage accounts and forcing purchases of worthless penny stocks that Nagy's and Laken's co-conspirators controlled.

The Lotus Scheme

Nagy was the sole officer and director of Lotus Bio-Technology Development Corp. ("Lotus"), a penny stock company that traded publicly under the ticker LBTD. By the beginning of August 2017, Nagy, Tang, Wong, and Sewell controlled the vast bulk of outstanding LBTD shares that were available for public trading.

On August 16, 2017, Rahim Mohamed, another co-conspirator, or someone acting at his direction, allegedly hacked into a U.S.-based online brokerage account and forced it to purchase 200,000 LBTD shares. At almost the same time, Wong and other co-conspirators sold approximately 261,000 LBTD shares, the majority of which were ultimately purchased by the hacked brokerage account at inflated prices.

On September 19, 2017, the co-conspirators struck again, on a significantly larger scale. Mohamed, or others acting at his direction, allegedly hacked into 24 customer accounts at multiple U.S.-based online brokerage firms and forced them to purchase millions of LBTD shares. While the compromised accounts were forced to buy LBTD shares, Wong and other co-conspirators sold approximately 7.75 million LBTD shares for nearly $1.1 million in proceeds.

In the weeks that followed, the proceeds from these sales were divided between Nagy, Wong, Tang, Mohamed, Sewell, and others.

The Good Gaming Scheme

Laken was the CEO, chairman, and controlling shareholder of a publicly traded company that, by late 2017, owned 61% of Good Gaming, Inc., a penny stock company that traded publicly under the ticker GMER. In 2002, Laken was convicted of racketeering conspiracy, wire fraud, and other federal charges related to a pension fund fraud and conspiracy to commit securities and wire fraud related to a stock manipulation scheme.

Between January 12 and January 18, 2018, Tang coordinated with Laken to transfer approximately 2.9 million GMER shares to accounts held by co-conspirators. On January 22, 2018, Mohamed, or others acting at his direction, allegedly hacked into several accounts at U.S.-based online brokerage firms and forced them to purchase more than one million GMER shares. At the same time, other co-conspirators sold more than 700,000 of the GMER shares they had originally obtained from Laken for nearly $170,000. The proceeds were then divided between Laken, Tang, Mohamed, and other co-conspirators.

On October 20, 2026, Zoltan Nagy, 60, of Vancouver, British Columbia, Canada pleaded guilty to conspiracy to commit securities fraud. His sentencing hearing is set for January 20, 2027, at 2:00 p.m. before U.S. District Judge Victoria M. Calvert. On September 25, 2026, Glenn Laken, 72, of Chicago, Illinois, pleaded guilty to conspiracy to commit securities fraud. His sentencing hearing is set for January 13, 2027, at 11:00 a.m.

Sewell, Tang, and Wong previously pleaded guilty for their involvement in the Lotus Scheme:

• On September 17, 2024, Phillip Sewell, 65, of Vancouver, British Columbia, Canada pleaded guilty to conspiracy to commit securities fraud. His sentencing hearing is set for January 22, 2027, at 10:30 a.m.
• On October 23, 2024, Richard Tang, 49, of Vancouver, British Columbia, Canada pleaded guilty to conspiracy to commit wire fraud. His sentencing hearing is set for January 21, 2027, at 10:30 a.m.
• On November 29, 2023, Davies Wong, 67, of Vancouver, British Columbia, Canada pleaded guilty to conspiracy to commit securities fraud. His sentencing hearing is set for January 21, 2027, at 1:30 p.m.

Tang faces up to twenty years' imprisonment, and Laken, Nagy, Sewell, and Wong face up to five years' imprisonment. Each defendant also may be ordered to pay restitution to the victims and a fine of up to $250,000 or twice the gain or loss amount, whichever is greater. In determining the actual sentence, the Court will consider the United States Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders.

Rahim Mohamed, 50, of Calgary, Alberta, Canada is still at large. Information regarding his whereabouts should be reported to local law enforcement.

This case is being investigated by the Federal Bureau of Investigation with substantial assistance from the Securities and Exchange Commission.

Assistant United States Attorneys Benjamin Wylly, Adam Sunstrom, and Samir Kaushal are prosecuting the case. First Assistant United States Attorney Nathan P. Kitchens and former Assistant United States Attorneys Tal C. Chaiken, Alex R. Sistla, and Christopher J. Huber previously prosecuted the case.

For further information please contact the U.S. Attorney's Public Affairs Office at [email protected] or (404) 581-6185. The Internet address for the U.S. Attorney's Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.