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Two Texans have been charged with securities fraud and money laundering offences over a pump-and-dump email stock scam.

The case follows an investigation by the Securities and Exchange Commission (SEC) into the illegal use of pump-and-dump junk mails to promote the sale of at least 13 low-value stocks between May 2005 and December 2006.

Darrel Uselton, 40, and his uncle, Jack Usleton, 69, allegedly used a series of spam emails campaigns to trick the gullible into buying worthless stocks on the basis of bogus insider information. The dynamic duo are suspected of using a network of compromised zombie PCs to distribute junk mail stock tips.

Investigators reckon gullible users were defrauded out of $4.6m in furtherance of the scam before the dodgy duo were caught. The pair allegedly made the mistake of sending one of their fraudulent emails to a SEC lawyer, prompting the launch of an investigation that ultimately led to charges against the two. Texas criminal authorities have seized more than $4.2m from bank accounts associated with the Useltons.

The prosecution of the Useltons is part of a larger SEC crackdown on stock scams. The SEC suspended trading of 35 companies which had been the subject of pump-and-dump emails in March. ®

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