The Wall Street CEO who was hit with a bombshell $18 million jury award in June for sexually harassing and then trashing online his pretty, young Swedish intern has been indicted on stock manipulation charges that netted him at least $20 million in illegal profits, new court papers state.
Benjamin Wey, the CEO of New York Global Group, had straw buyers in China load up on stock in US companies, orchestrated mergers between Chinese firms and those US companies, and then manipulated those stocks to make money, prosecutors charge.
Wey faces 8 counts of money laundering, securities fraud, and failing to disclose ownership of stocks, according to a Manhattan federal court indictment unsealed Thursday.
“Ben Wey fashioned himself a master of industry, but as alleged, he was merely a master of manipulation,” Manhattan US Attorney Preet Bharara said in a statement, adding that Wey made tens of millions in illegal profits.
“The indictment charges that Wey used reverse merger transactions between Chinese companies and U.S. shell companies to illegally conceal his ownership interest and then, with the help of his alleged co-conspirator, manipulated the market so that he could sell his interest at artificially inflated prices.”
Wey, 43, was arrested Thursday morning at his Battery Park City home and will be presented Thursday afternoon in court.
The financial conspiracy Wey orchestrated was complex and began in 2007, according to court papers.
Wey had his relatives and employees in China buy stock in US companies and then encouraged Chinese companies to merge with those US companies, resulting in SmartHeat, Inc., Deer Consumer Products, Inc., and CleanTech Innovations, Inc., prosecutors charge.
Wey then got those companies listed on Nasdaq so he could make money manipulating the share price of those stocks, all while concealing his shadow ownership of the stocks, according to prosecutors.
“More than $20 million in cash was transferred from a Hong Kong account in the name of Wey’s sibling to bank accounts in the United States that Wey and/or Wey’s wife controlled,” prosecutors said in a statement.
Wey used his illegal profits – which prosecutors said included that $20 million – to buy his apartment in the Ritz-Carlton Hotel in Battery Park City, court papers state.
Wey faces 25 years in prison on one of the securities fraud alone, plus a fine of $5 million or double what he gained from his crimes.
The indictment also charges Switzerland resident Seref Dogan Erbek, 53, with buying and selling stocks at Wey’s command. He remains at large.
The Securities and Exchange Commission filed a civil lawsuit Thursday against Wey, his sister, his wife Michaela Wey, and two US attorneys for being part of the scheme.
“Michaela Wey held trading authority over Swiss brokerage accounts in the names of her family members and other nominees who held warrants or large positions in the shares of the NYGG clients,” the SEC complaint states, adding that a cellphone registered to her called the Swiss broker accused of manipulating the stocks.
Wey attorney David Siegal told Reuters that Wey denied the charges and looked forward to clearing his name.
“This news confirms what we have been saying about Wey all along; he is dishonest and cannot be trusted,” said David Ratner, the lawyer who represented Swedish intern Hanna Bouveng at trial.
“It also reaffirms the jury verdict for Hanna. We knew that he was bad. Now he will pay for both his harassment and his crimes.”
In June a federal jury awarded Bouveng, 25, the payday in her case against her married ex-boss Wey.
Bouveng got $2 million in compensatory damages over the harassment and defamation and $16 million in punitive damages.
Bouveng testified that Wey pressured her into having sex with him at the luxury Financial District apartment he had rented for her.
Wey lasted just two minutes during the pair’s first tryst, her lawyer had said in opening statements.
When he later found another man in Bouveng’s bed, Wey fired her that day, kicked her out of the apartment and e-mailed her dad in what would be the beginning of a grimy online campaign against her, according to trial testimony.
“I saw a 6-foot-tall homeless black man named James lying on her bed,” Wey wrote to Bouveng’s father, Nils Sundqvist, in one e-mail entered into evidence.
“The man was totally naked, dirty, totally drunk and perhaps on illegal drugs.”
Wey also e-mailed her family and friends, and called her a “Swedish party girl” and a prostitute on his bizarre Web site, TheBlot.com.
