The U.S. Department of Justice (DOJ) has slapped three individuals with criminal charges related to their alleged involvement in a crypto pyramid scheme that looted $1.89 billion from victims.
Australian native Sam Lee allegedly co-founded “HyperFund,” an online investment platform that falsely claimed investors who purchased “memberships” would receive between 0.5% to 1% daily in passive rewards until the company either doubled or tripled their initial investment.
HyperFund fraudulently claimed the rewards came from large-scale crypto mining revenues, according to a new press release from the DOJ. Allegedly, the mining operation didn’t exist, and the platform allegedly started to halt customer withdrawals in July 2021.
Lee was charged with conspiracy to commit securities fraud and wire fraud and faces a maximum sentence of five years in prison.
The DOJ also charged Miami resident Rodney Burton with one count of conspiracy to operate an unlicensed money-transmitting business and one count of operating an unlicensed money-transmitting business. Burton allegedly promoted HyperFund.
One of the platform’s other promoters, Maryland resident Brenda Chunga, pled guilty to conspiracy to commit securities fraud and wire fraud and faces up to five years in prison. Chunga also agreed to pay at least $3 million in restitution to victims.
In a parallel action, the U.S. Securities and Exchange Commission (SEC) also charged Lee and Chunga with violating the anti-fraud and registration provisions of federal securities laws.
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Source: https://dailyhodl.com/2024/01/31/doj-charges-founder-and-top-promoters-of-alleged-1890000000-crypto-ponzi-scheme-that-promised-high-returns/