Dumped Shares

With the price inflated, Shalon, Aaron and the promoters began dumping their shares in coordinated fashion, often generating millions of dollars in profit per stock. Their sales eventually put downward pressure on the stock, and unsuspecting investors suffered big losses, prosecutors said.

The profits, Shalon boasted, were “a small step towards a larger empire.”

In all, Shalon, Aaron and Orenstein manipulated dozens of stocks, prosecutors said. They made more than $2 million in 2012 when they pushed up the price of Mustang Alliances Inc., a purported mining company with operations in Honduras, according to a Securities and Exchange Commission lawsuit filed against the three in July.

When all else failed, they hacked the watchdogs.

Shalon’s alleged victims included a risk-intelligence firm in Bellevue, Washington, that flagged merchants accepting payments for “unlawful goods or services," according to the indictment.

Prosecutors said the defendants hacked into the company’s computer network to read e-mails and keep tabs on its efforts. The hackers figured out which credit and debit cards the company used to detect bogus merchants, then blacklisted those card numbers from Shalon’s network.

With hundreds of millions rolling in from their global enterprise, the gang needed a way to process and launder its cash, prosecutors said.