A 56-year-old Michigan man has been indicted for a multimillion-dollar penny-stock scam that left investors with millions of dollars in losses.
Bobby Shumake Japhia, also known as Robert Samuel Shumake Jr., Robert Japhia, and Shaman Bobby Shu, was charged with one count of securities fraud and one count of obstruction by a federal grand jury in the District of Columbia yesterday.
According to the indictment, Japhia allegedly ran Minerco’s day-to-day operations and organized a scheme to defraud investors in the publicly traded securities of Minerco by making or causing to be made materially false and misleading statements to the public.
The scheme, which began in or around January 2020, allegedly artificially inflated the share price of and demand for Minerco stock. Japhia allegedly concealed his role with Minerco by recruiting another individual, Julius Jenge, to serve as the nominal chief executive officer of Minerco.
Japhia allegedly used an alias to promote Minerco on an investor message board and provided the false and misleading impression that he was not affiliated with Minerco and was an independent investor. He also allegedly recruited others to promote Minerco on internet message boards to further create the false and misleading impression that the public had a favorable view of Minerco.
Japhia allegedly sold nearly one billion shares of Minerco that he covertly acquired and then caused himself or entities under his control to receive at least $2.5 million from the sale of the shares.
After learning of an SEC investigation into Minerco, Japhia allegedly obstructed the SEC proceedings by deleting the contents of at least one Minerco email account, which Japhia used to conduct Minerco business.
Japhia faces a maximum penalty of 20 years in prison on each count if convicted.
The chief executive officer of Minerco, Julius Jenge, was arrested earlier this year on charges of securities fraud related to a scheme to defraud investors in Minerco.
Japhia’s scheme allegedly caused the share price of, and demand for, Minerco’s securities to artificially increase, ultimately resulting in Minerco investors’ losing millions of dollars.
The SEC Office of Inspector General and USPIS are investigating the case.
For more information, contact the Fraud Section’s Victim Witness Unit toll-free at (888) 549-3945 or by email at victimassistance.fraud@usdoj.gov.
You are also encouraged to visit the webpage for this case at www.justice.gov/criminal/case/united-states-v-bobby-shumake-japhia.
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Key Facts
- State: District of Columbia
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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