Department of Justice Announces Enforcement Actions Charging Six People with Cryptocurrency Fraud Offenses in Cases Involving Over $100 Million in Intentional Loss | takeover bid

The Department of Justice, in conjunction with federal law enforcement partners, today announced criminal charges against six defendants in four separate cases for their alleged involvement in cryptocurrency fraud, including the largest non-fungible token (NFT) scheme known to date, a fraudulent investment fund that allegedly traded on cryptocurrency exchanges, a global Ponzi scheme involving the sale of unregistered crypto securities and a fraudulent Initial Coin Offering.

“The Department of Justice and our partners are committed to using all available tools to protect consumers and investors from fraud and manipulation,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Criminal Division of the Ministry of Justice. “These indictments reflect our deep commitment to prosecuting those involved in cryptocurrency fraud and market manipulation.”

“Our office is committed to protecting investors from sophisticated scammers seeking to take advantage of the relative newness of digital currency,” said U.S. Attorney Juan Antonio Gonzalez of the Southern District of Florida. “As with any emerging technology, those investing in cryptocurrency should be wary of lucrative opportunities that seem too good to be true.”

“These cases are a crucial reminder that some scammers hide behind buzzwords, but ultimately they’re just trying to separate people from their money,” said U.S. Attorney Tracy L. Wilkison of the district. Central California. “We will continue to work with our law enforcement partners to educate and protect potential investors on traditional and trendy investments.”

“As cryptocurrency markets advance and provide new opportunities for consumers, criminals are also looking for ways to exploit them,” said Deputy Director Luis Quesada of the FBI’s Criminal Investigations Division. “The FBI, alongside our law enforcement partners, will continue to investigate and bring these criminals to justice, and protect the American people.”

“This investigation and prosecution illustrates the importance of public-private partnerships,” said Associate Executive Director Steve K. Francis of Homeland Security Investigations (HSI). “Through our strong relationships with our industry partners, HSI received information leading to this investigation and the ultimate indictment. HSI will continue to investigate criminal organizations operating in emerging technologies and is proud to have worked with the Department of Justice’s Fraud Section to end this criminal activity.

The following charges are being announced today as part of this national law enforcement action.

NFT cryptographic scheme:

United States vs. Le Ahn Tuan:

Le Anh Tuan, 26, a Vietnamese national, 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 as part of a scheme involving the “Baller Ape” NFT. As alleged in the indictment, Tuan was involved in the Baller Ape Club, an NFT investment scheme that allegedly sold NFTs in the form of various cartoon characters, often including the figure of an ape. According to the indictment, shortly after the first day the Baller Ape Club NFTs were sold to the public, Tuan and his co-conspirators engaged in what is known as a “rug pull.” , shutting down the alleged investment project, taking down its website and robbing investors. ‘ silver. Based on blockchain analysis, shortly after the draw, Tuan and his co-conspirators 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 transferred across multiple cryptocurrency blockchains and used decentralized cryptocurrency exchange services to hide the trail of stolen funds from Baller Ape investors. In total, Tuan and his co-conspirators secured around $2.6 million from investors. If convicted on all counts, Tuan faces up to 40 years in prison. HSI is investigating the matter. Fraud Section trial prosecutors Kevin Lowell and Tian Huang are prosecuting the case.

Crypto Ponzi and Unregistered Title System:

United States against Emerson Pires, Flavio Goncalves and Joshua David Nicholas:

Emerson Pires, 33, and Flavio Goncalves, 33, both of Brazil, and Joshua David Nicholas, 28, of Stuart, Florida, have each been charged in the Southern District of Florida with one count of conspiracy in to commit wire fraud and one count of conspiracy. to commit securities fraud in a global cryptocurrency-based Ponzi scheme that raised around $100 million from investors. Pires and Goncalves were also charged with conspiracy to commit international money laundering. The indictment alleges that Pires and Goncalves, both founders of EmpiresX, as well as Nicholas, the so-called “Head Trader” of EmpiresX, fraudulently promoted EmpiresX, a cryptocurrency investment platform and an unregistered securities offering, making numerous misrepresentations regarding, among other things, a so-called proprietary trading robot and fraudulently guaranteeing returns to investors and prospective investors of EmpiresX. As alleged in the indictment, blockchain analysis shows that Pires and Goncalves then laundered investors’ funds through a foreign-based cryptocurrency exchange and operated a fraud scheme. Ponzi by paying previous investors with money obtained from later investors from EmpiresX. If convicted on all counts, Pires and Goncalves face up to 45 years in prison and Nicholas faces up to 25 years in prison. The FBI and HSI are investigating the case. Fraud Section Trial Attorneys Kevin Lowell and Sara Hallmark and Assistant U.S. Attorney Yisel Valdes of the U.S. Attorney’s Office for the Southern District of Florida are prosecuting the case.

Initial Crypto Coin Offering Schematic:

United States vs. Michael Alan Stollery:

Michael Alan Stollery, 54, of Reseda, California, was the CEO and founder of Titanium Blockchain Infrastructure Services (TBIS), a purported cryptocurrency investment platform. Stollery has been charged in an information filed in the Central District of California with one count of securities fraud for his role in a cryptocurrency fraud scheme involving the initial coin offering of TBIS, which has raised approximately $21 million from investors in the United States and abroad. As alleged, in order to entice investors, Stollery falsified TBIS white papers (a document for potential investors that generally explains how the underlying cryptocurrency technology works and the purpose of the cryptocurrency project ), planted false testimonials on the TBIS website, and fabricated alleged business dealings with the U.S. Federal Reserve Board and dozens of high-profile companies, including Apple Inc., Pfizer Inc., and The Walt Disney Company, to create an appearance of legitimacy. If convicted on all counts, Stollery faces up to 20 years in prison. The FBI and the West San Francisco area office of the Federal Reserve Board are investigating the case. Fraud Section prosecutors Kevin Lowell, Tian Huang and Andrew Tyler are prosecuting the case.

“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 the Bureau’s Acting Special Agent in Charge Cory Nootnagel. of the Inspector General of the Board of Governors. Federal Reserve System and Bureau of Consumer Financial Protection, Western Region. “I commend our officers, their federal law enforcement partners, and the Justice Department’s Criminal Division Fraud Section for their hard work and perseverance.”

Diagram of cryptographic products:

United States vs. David Saffron:

David Saffron, 49, from Las Vegas, Nevada, was the owner of Circle Society, a cryptocurrency investment platform. Saffron used the Circle Society to solicit investors to participate in an unregistered commodity pool, which is a fund that combines investor contributions to trade in futures and commodity markets. Safran was charged in the Central District of California with one count of conspiracy to commit wire fraud, four counts of wire fraud, one count of conspiracy to commit commodity fraud and one chief obstruction of justice. As alleged in the indictment, Saffron falsely told investors that he traded investors’ funds to earn profits using a trading bot that could execute over 17,000 trades per hour on various crypto exchanges. -change. Safran falsely represented that its trading bot would generate between 500% and 600% return on the amount invested. To entice investors to invest, Saffron reportedly led investor meetings at luxury homes in Hollywood Hills and elsewhere, and traveled with a team of armed security guards in order to create a false appearance of wealth and success. In total, Saffron fraudulently collected approximately $12 million from investors. If convicted on all counts, Saffron faces up to 115 years in prison. IRS Criminal Investigation (IRS-CI) is investigating the case. Fraud Section trial prosecutors Kevin Lowell and Theodore Kneller and Assistant U.S. Attorney James Hughes of the U.S. Attorney’s Office for the Central District of California are prosecuting the case.

“Mr. Safran exploited investor interest in cryptocurrency by luring victims with fake technology and bogus promises of guaranteed returns,” said Special Agent in Charge Ryan L. Korner of the CIA Field Office. IRS-CI in Los Angeles.”In reality, Mr. Saffron was operating an illegal Ponzi scheme to defraud victimized investors and was using the funds for his personal benefit. The IRS-CI will pursue and eliminate these schemes to protect investors, preserve our commodity markets and bring financial fraudsters to justice.

Victims of crypto fraud:

All investors victimized by the Baller Ape Club, EmpiresX, TBIS and Circle Society programs are encouraged to visit the web page https://www.justice.gov/criminal-vns/crypto-enforcement to identify themselves as potential victims and get more information. about their rights as victims, including the possibility of submitting a victim impact statement.

An indictment is only an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt by a court.

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