One of the Canadians was arrested in Ontario and another one was among six suspects arrested in the U.S., authorities said.
Two other Canadians are being sought in what the department is calling one of the largest international penny stock frauds in history.
Gregory Ellis, 46, and Kolt Curry, 38, are in custody but authorities said Sandy Winick, 55, remains at large in Thailand and Gregory Curry, 63, has yet to be located.
Ellis, who lived in Canada at the time of his arrest, acted as president of several of the companies that issued the stocks, according to the indictment.
Winick "orchestrated" the schemes and had lived in Canada, the U.S., China, Thailand and Vietnam over the years, the document said. He allegedly was recruiting staff to open new call centres to expand the operation in New York City and Toronto.
Gregory Curry helped manage the existing call centres in Canada, Vietnam and Thailand, where he lived, the document said. He worked with Kolt Curry, who split his time between Canada and Thailand, it said.
The two Curry men — whom the department identified as father and son — also prepared letters and email accounts to promote the con, the indictment said.
The arrests were the result of a multi-year investigation involving the FBI and the RCMP, the department said, adding it relied on wiretaps in the U.S. and undercover agents abroad. The RCMP declined to comment on the investigation.
The indictment alleges that the defendants were involved in a massive "pump and dump" scheme — buying controlling interests in sketchy startup companies, then artificially inflating their value by promoting them in fictitious emails, social media messages and news releases.
The fraudulent sales campaign generated more than $120 million in investments by tens of thousands of people in the United States, Canada and 33 other countries, authorities said.
Working out of boiler room phone centres in Canada, Thailand and Britain, the defendants again victimized the same investors by convincing them to pay $20 million in advance fees in return for helping them sell their securities or join lawsuits to reclaim their losses, court papers said.
In some cases, it's alleged the accused pretended to work for the U.S. Internal Revenue Service.
The list of victims included several hundred Canadians, Justice Department spokesman Zugiel Soto said in an email to The Canadian Press.
"Where others saw citizens of the world, the defendants saw a pool of potential marks," U.S. Attorney Loretta Lynch said in a statement.
"They cheated, lied and swindled investors into buying billions of shares of worthless stock, then turned around and used a second scam to cheat those investors again."
Heath Rodgirs, a senior fraud investigator with Prince-Langevin and Associates in Edmonton, said "pump and dump" schemes are very common and penny stocks — which often trade outside the major market exchanges — are particularly vulnerable.
"Because they're so cheap and there's so many of them, it gives a fraudster an opportunity," he said.
"It doesn't take much to set up a company and make it look like something. So just by the nature of penny stocks, there's a greater ability for fraud in it."
One of the companies cited in the indictment, Liquid Gold International Corp., was named in a case that came before the Ontario Securities Commission and also involves Winick and both Currys.
The matter was split into two cases, one involving Gregory Curry, Winick, Liquid Gold and another company named BFM Industries Inc.
In a ruling issued last week, the commission found the BFM and Liquid Gold schemes to be "entirely fraudulent."
"The activities of those involved in the schemes include unregistered trading and illegal distributions," OSC adjudicator James D. Carnwath wrote in the decision.
The other file involved Kolt Curry, another person and two companies — one in Ontario and one in Nevada.
An agreed statement of facts in that case found Curry, the other person and the two companies "contravened Ontario securities law" and acted in a way that is "contrary to the public interest."
Sanctions in both cases are expected to be laid out later this month and in September.
The American suspects in the penny stocks scheme are Gary Kershner, 72; Joseph Manfredonia, 45; Cort Poyner, 44; Songkram Roy Sahachaisere, 43; and William Seals, 51.
The charges include conspiracy to commit securities fraud, conspiracy to commit wire fraud, wire fraud, securities fraud and false personation of an officer of the United States.
If convicted, the accused could face up to 20 years of imprisonment for each count of conspiracy to commit wire fraud, wire fraud and securities fraud, as well as up to five years for conspiracy to commit securities fraud.
The false personation charge could carry a three-year prison sentence.
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