The U.S. Securities and Exchange Commission (SEC) has uncovered a massive cryptocurrency Ponzi scheme, indicting 17 individuals who collectively defrauded thousands of Latino investors in the U.S. out of approximately $300 million.
Fraud Allegations Revealed: Operation CryptoFX
The SEC’s investigation revealed the following: CryptoFX LLC, based in Houston, Texas, served as a front for the fraudulent activity organized by the 17 individuals indicted. CryptoFX’s main operators, Mauricio Chavez and Giorgio Benvenuto, were accused of orchestrating the scheme, which targeted more than 40,000 primarily Latino investors in the United States.
Masquerading as a legitimate platform for trading cryptocurrency assets and participating in the foreign exchange market, CryptoFX and its leaders, spread across Texas, California, Louisiana, Illinois and Florida, lure investors with promises of huge returns ranging from 15% to 100%. I did. %.
Deceptive Appearance: Misuse of Funds
Between May 2020 and October 2022, the perpetrators behind CryptoFX scammed unsuspecting investors out of $300 million. Contrary to claims that they were utilizing the funds for cryptocurrency and forex trading, the scammers diverted the money to support their lavish lifestyle. Instead of making a profit, they leveraged their funds to pay off early investors and line their pockets with commissions and bonuses.
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The SEC’s pursuit of justice and redress
SEC Enforcement Division Director Gurbir S. Grewal condemned CryptoFX’s fraudulent practices, calling it a “$300 million Ponzi scheme” that preyed on Latino investors with promises of guaranteed financial gains. In its pursuit of justice, the SEC seeks permanent injunctions, pre-judgment compensation, and civil penalties for wrongdoers.
Despite court orders to cease operations, certain defendants, such as Gabriel and Dulce Ochoa, continued to solicit victims for investments. Another defendant, Maria Saravia, dismissed the SEC’s lawsuit as a fraud after investors raised concerns.
Conclusion: Hold the perpetrator accountable
As the investigation progressed, the SEC remained resolute in holding accountable not only the ringleaders but also all who participated in perpetuating the fraudulent scheme. The SEC’s action, which resulted in thousands of victims across multiple states and countries, highlights its commitment to protecting investors and maintaining the integrity of financial markets.