In a $300 million crypto-related Ponzi scheme, 17 people were charged by the SEC with defrauding 40,000 investors. In the complaint, it says most of the $300 million didn’t go toward trading but to the defendants’ lifestyles including buying a $1 million house in Texas.
What is the scheme about?
Latino investors in 10 US states and two other countries were duped by the defendants into believing their money would be invested in crypto but it wasn’t, the SEC said in a press release. 17 defendants were charged by the SEC, two settled.
According to SEC Enforcement Director Gurbir Grewal the victims were promised “life altering wealth” by the scheme.
“The only thing that CryptoFX guaranteed was a trail of thousands upon thousands of victims stretching across 10 states and two foreign countries,” he said. “A scheme of that size requires lots of participants and as today’s action demonstrates, we will pursue charges against not just the principal architects of these massive schemes, but all those who further their fraud by unlawfully soliciting victims.”
It’s alleged that one defendant used the money to buy a $1 million house in Texas. The defendants also “engaged in unregistered offers and sales of CryptoFX investments and acted as unregistered brokers,” according to the complaint filed in the US District Court for the Southern District of Texas in the Houston division.
In an emergency action last October, the SEC charged Mauricio Chavez and Giorgio Benvenut who are the scheme’s leaders. The Thursday filing increases the number of defendants and alleges at least two of them, Gabriel and Dulce Ochoa, continued soliciting investors after last year’s action.
Past actions by the SEC
Mauricio Chavez and Giorgio Benvenuto, two main principals of the scheme, were charged in late 2022 after the regulator filed an emergency action. SEC’s Fort Worth regional office director Eric Werner says the SEC continued its investigation after filing the complaint to find others involved in the scheme.
Despite court orders halting the scheme, Gabriel and Dulce Ochoa kept soliciting investors. Another defendant Maria Saravia is alleged to have told investors that the SEC’s lawsuit is fake, according to the regulator. Gabriel Ocha had even instructed two investors to take back their complaint to the SEC, per the regulator’s statement.
It is also reported that two of the 17 defendants settled without admitting or denying the allegations of the SEC.