A Tennessee court ordered a couple to pay over $6.8 million for running a fake crypto pool. The scheme promised profits under the guidance of a person called “Coach Wendy,” whose identity is still unknown.
The couple lured investors through real estate connections
Michael and Amanda Griffis were real estate agents from Clarksville. They operated a pool called “Blessings of God Thru Crypto” between 2021 and 2023. The Commodity Futures Trading Commission (CFTC) said the couple raised more than $6.5 million from around 145 investors.
The couple first came under investigation in July 2023, when the CFTC filed a case against them. On Thursday, a US court in Tennessee entered a consent order that resolves the enforcement action.
The order requires the fraudsters to pay $5.5 million in restitution to victims. They must also pay a civil monetary penalty of $1.35 million. This makes the total penalty equivalent to $6.8 million. The order further imposes lifetime bans on the couple from commodity trading and CFTC registration.
According to court findings, the Griffises used their real estate connections to attract investors. They told clients and acquaintances that funds would be traded in crypto futures through the Apex Trading Platform. They said trades would be supervised by an individual called “Coach Wendy.”
The trading commission clarified that Apex was not a legitimate trading platform. It was modeled on an overseas exchange that had no local registration in America. Investigators said they have not been able to find the true identity of “Coach Wendy.”
More than $4 million from the scheme was sent overseas after being deposited into the fake website. The couple used the rest of the money to pay personal debts and for shopping. The CFTC said around $855,000 was paid to the investors. Those payments were structured in a Ponzi-like fashion, where earlier investors were repaid using funds from newer investors.
CFTC warns the public about crypto fraud
The CFTC said the case indicates a wider problem of fraudsters using community trust to run Ponzi schemes. The agency pointed to a Denver pastor and his wife who were recently ordered to repay $3.39 million after raising millions for worthless church tokens.
In another case, a Long Island man was hit with a $228 million CFTC judgment. A separate operator received a nine-year prison sentence for a Ponzi scheme that targeted members of a Haitian church community.
Experts said investors in the Tennessee duo case may have ignored red flags, such as a website without any registered company details. Fraudsters often look for quick money and plan to exit before being caught. In crypto markets, funds can move across borders quickly, which makes recovery difficult.
CFTC officials also warned the public about engaging with unverified investment platforms. Charles Marvine, CFTC chief, said, “If an investment opportunity seems too good to be true, it almost certainly is, for you and anyone you bring along.”
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Source: https://www.cryptopolitan.com/couple-face-6-8-m-penalty-fraudulent-crypto/