Randy M. Cho Gets 12 Years for Selling Fake Pre-IPO Google and Facebook Shares to 'Friends and Family'

Case from 2013 (U.S. Attorney's Office release: Jan. 18, 2013). Published on Scammers.com Oct. 16, 2026; case status is current as of that date.

Randy M. Cho, 41, of Seattle, formerly of Chicago and Newton, Mass., was sentenced on Jan. 18, 2013, to 12 years in federal prison and taken into custody that day. He had sold 57 investors what he said were discounted shares of well-known companies, often before their IPOs, and took just under $8 million. He also failed to pay nearly $1.5 million in federal income taxes, the U.S. Attorney's Office for the Northern District of Illinois announced [1].

How the scheme worked

According to prosecutors [1]:

1. A trader with "access": From about 2001 to 2009, Cho presented himself as a self-employed securities trader who could buy stock in well-known companies through a "friends and family" pool, often ahead of supposed IPOs.
2. The Goldman Sachs claim: He falsely said he had a special relationship with Goldman Sachs that let him buy discounted shares.
3. Big names: At various times he offered pre-IPO shares of AOL/Time Warner, Google, Rosetta Stone and Facebook.
4. Fake profits: He falsely told one investor they had made $1 million on Google stock.
5. The money: He raised about $9.6 million from investors in the U.S. and abroad and never bought any stock for them. He spent much of it on his home and furnishings, cars, jewelry and his business, and used about $1.68 million to make Ponzi-type payments.
6. Tax fraud: He failed to report about $4.8 million in income from 2004 to 2007.

The sentence

Randy M. Cho, 41, Seattle (formerly Chicago and Newton, Mass.)

• Plea: guilty to wire fraud and tax fraud in August 2012, resolving a December 2010 indictment.
• Sentence: 12 years in prison and three years of supervised release, imposed by U.S. District Judge James Zagel. He was ordered to pay $7,995,707 in restitution to investors and $1,496,339 to the IRS. Judge Zagel noted that victims were unlikely to recover much [1].

The FBI and IRS Criminal Investigation investigated, with help from the SEC, which brought a civil enforcement lawsuit.

Red flags

• Discounted pre-IPO shares of famous companies offered by an individual "friend."
• Claims of a special relationship with a big bank that unlocks discounts.
• No brokerage statement showing shares in your name.

Protect yourself

1. Read the SEC's warnings on pre-IPO investment scams at investor.gov.
2. Check the seller on FINRA BrokerCheck at brokercheck.finra.org.
3. Demand proof of ownership from a registered broker-dealer or transfer agent, and report fraud to the SEC at sec.gov/tcr.

Case status (as of Oct. 16, 2026)

Defendant	Court	Status as of Oct. 16, 2026	Source
Randy M. Cho	N.D. Ill. (Judge Zagel)	Pleaded guilty Aug. 2012 to wire fraud and tax fraud; sentenced Jan. 18, 2013, to 12 years; $7,995,707 investor restitution and $1,496,339 to the IRS	[1]

Sources

1. U.S. Attorney's Office, Northern District of Illinois, "Former Chicago Man Sentenced To 12 Years In Prison For $8 Million Investment Fraud And $1.5 Million Tax Fraud," Jan. 18, 2013. https://www.justice.gov/usao-ndil/pr/former-chicago-man-sentenced-12-years-prison-8-million-investment-fraud-and-15-million

---

Corrections and updates: If you are named in this article, or represent someone who is, and believe anything here is inaccurate or out of date (including a dismissal, acquittal, or change in case status), please contact us at editorandchief@scammers.com. We will review it and update the article promptly.