July 1, 2022:
IMHO, this coordinated report of multiple prosecutions in a single main DOJ press release may well signal a major pivot in law enforcement priorities. According to Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division. “These indictments reflect our deep commitment to prosecuting individuals involved in cryptocurrency fraud and market manipulation.”
Crypto NFT Scheme: Defendant was charged with one count of conspiracy to commit wire fraud and one count of conspiracy to commit international money laundering in the Central District of California in connection with a scheme involving the “Baller Ape” NFT. Defendant and his co-conspirators engaged in what is known as a “rug pull,” ending the purported investment project, deleting its website, and stealing the investors’ money. Based on blockchain analytics, shortly after the rug pull Defendants allegedly laundered investors’ funds through “chain-hopping,” a form of money laundering in which one type of coin is converted to another type and funds are moved across multiple cryptocurrency blockchains, and used decentralized cryptocurrency swap services to obscure the trail of Baller Ape investors’ stolen funds. In total, defendants obtained approximately $2.6 million from investors.
U.S. Attorney Tracy L. Wilkison for the Central District of California said “We will continue to work with our law enforcement partners to educate and protect potential investors about both traditional and trendy investments.”Crypto Ponzi and Unregistered Securities Scheme: Defendants were charged with one count of conspiracy to commit wire fraud and one count of conspiracy to commit securities fraud in connection with a global cryptocurrency-based Ponzi scheme.
Defendants fraudulently promoted a cryptocurrency investment platform & unregistered securities offering, by making numerous misrepresentations regarding, among other things, a purported proprietary trading bot & fraudulently guaranteeing returns to investors U.S. Attorney Juan Antonio Gonzalez for the Southern District of Florida said “As with any emerging technology, those who invest in cryptocurrency must beware of profit-making opportunities that appear too good to be true.”
Crypto Initial Coin Offering Scheme: Defendant charged with one count of securities fraud for his role in a cryptocurrency fraud scheme involving an initial coin offering, which raised approximately $21 million from investors in the United States and overseas. Defendant allegedly lured investors by falsifying TBIS white papers, planting fake testimonials on TBIS’s website, and fabricating purported business relationships with the U.S. Federal Reserve Board and dozens of prominent companies.
“Those who fraudulently misrepresent their relationship with the Federal Reserve to deceive the public in cryptocurrency or other fraud schemes will be held accountable and brought to justice,” said Acting Special Agent in Charge Cory Nootnagel-Board of Gov of Fed Reserve System. Crypto Commodities Scheme: Defendant allegedly ran a cryptocurrency investment platform to solicit investors to participate in an unregistered commodity pool, which is a fund that combines investors’ contributions to trade on the futures and commodity markets. Defendant was charged with one count of conspiracy to commit wire fraud, four counts of wire fraud, one count of conspiracy to commit commodities fraud, and one count of obstruction of justice.
Defendant was charged with one count of conspiracy to commit wire fraud, four counts of wire fraud, one count of conspiracy to commit commodities fraud, and one count of obstruction of justice. Defendant is allegedly have falsely represented to investors that he traded investors’ funds to earn profits using a trading bot that could execute over 17,000 transactions per hour on various cryptocurrency exchanges. Defendant allegedly falsely represented that his trading bot would generate between 500% to 600% returns on the amount invested.
To entice investors to invest, Defendant allegedly led investor meetings at luxury homes in the Hollywood Hills and elsewhere, and traveled with a team of armed security guards in order to create the false appearance of wealth and success.
“[Defendant] preyed on investor interest in cryptocurrency by enticing victims with fake technology and false promises of guaranteed returns,” said Special Agent in Charge Ryan L. Korner of the IRS-CI’s Los Angeles Field Office. Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division said “As cryptocurrency marketplaces advance and offer new opportunities for consumers, criminals also seek ways to exploit them.”