DOJ to Pay $200M in Chinese Liberal Education Holdings Stock Fraud Case

The Department of Justice initiated a compensation program on Tuesday for victims of an alleged investment scam linked to Chinese Liberal Education Holdings Ltd (CLEU). Federal officials claim that the “pump-and-dump” scheme resulted in losses of millions for investors. This development is a significant step in a case that uncovered how scammers exploited social media and stock manipulation to defraud unsuspecting individuals.

Seven individuals are facing charges for allegedly coordinating the fraudulent scheme between November 2024 and February 2025. These defendants posed as American investment advisors on various social media platforms. They lured investors with promises of high returns from CLEU stock, a company listed on NASDAQ that purported to offer educational services in China. Through coordinated tactics, they artificially inflated the stock’s price before selling off their shares, pocketing millions in profits.

Assistant Attorney General A. Tysen Duva described the scheme as a combination of social media manipulation and market exploitation. He stated, “The defendants allegedly made millions by setting a trap for unsuspecting investors, many of whom lost their life savings.” Following the discovery of the fraudulent activities, federal authorities seized assets worth over $200 million linked to the scam in May 2025. These funds now serve as the foundation for the CLEU remission fund.

Subsequently, CLEU was removed from NASDAQ, resulting in significant financial losses for some investors. Despite the widespread manipulation allegedly carried out by the defendants, the FBI managed to recover victims’ funds before they could be transferred to overseas bank accounts. Special Agent in Charge Douglas S. DePodesta highlighted the success of the investigation in safeguarding investors’ money.

The defendants are currently on the run, evading arrest as outstanding warrants are issued against them. Kroll Settlement Administration will oversee the compensation process for victims. Individuals affected by the scam can submit claims through the official website at CLEUremissionfund.com or by contacting 1-833-754-8247 for assistance.

The Justice Department clarified that participating in the compensation process does not require any payment. Officials cautioned victims to beware of impostors claiming to be affiliated with the government or the remission administrator. Since 2000, the department’s Asset Forfeiture Program has restored over $12 billion to victims of various crimes. The CLEU case represents a significant recovery following pump-and-dump fraud prosecutions.

U.S. Attorney Andrew S. Boutros emphasized that the $200 million forfeiture should serve as a deterrent to individuals engaging in market manipulation. He declared, “Federal law enforcement will aggressively pursue fraudulent profits from those who seek to prey upon investors by manipulating the U.S. stock market.” The investigation was a collaborative effort involving the FBI, the Securities and Exchange Commission, and the U.S. Attorney’s Office for the Northern District of Illinois.