The U.S. Department of Justice (DoJ) has filed a National Enforcement Action (NEA) lawsuit against six individuals in a crypto Ponzi deal. The culprits are charged for fraud totaling over $100 mn.
The six accused are Le Anh Tuan, Emerson Pires, Flavio Goncalves, Joshua David Nicholas, Michael Alan Stollery, and David Saffron. The investors of Baller Ape Club, EmpiresX, TBIS, and Circle Society stand defrauded in the crypto Ponzi.
The $100 mn fraud (criminal) charges by the DoJ are filed in 4 separate cases. The cases involved are as follows:
- A misleading (largest ever known) NFT (Non-Fungible Token) scheme.
- A cryptocurrency exchanges-trading investment fund with deceit at its core.
- An international Ponzi scheme with the “sale of unregistered crypto securities.”
- An initial coin offering (ICO) founded and ran with fraud as its objective.
“As cryptocurrency marketplaces advance and offer new opportunities for consumers, criminals also seek ways to exploit them. The FBI, alongside our law enforcement partners, will continue to investigate and bring those criminals to justice,” said Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division.
Also read: US Congressional Hearing Reveals Future of Digital Asset Regulation
Let’s briefly examine the concerned cryptocurrency Ponzi frauds:
- Crypto NFT Scheme:
United States v. Le Ahn Tuan:
The “Baller Ape” Club NFT conspirator, Le Ahn Tuan, faces international money laundering charges (40 years in prison if proven guilty) in the Central District of California. The NFT scam totals $2.6 million via “chain-hopping” and decentralized cryptocurrency swap services to prevent funds from trailing.
- Crypto Ponzi Scheme and Unregistered Securities Scheme:
United States v. Emerson Pires, Flavio Goncalves, and Joshua David Nicholas:
Charged with wire and securities fraud in the Southern District of Florida, the cryptocurrency Ponzi scheme defrauded investors for $100 million. The EmpiresX scammers used a proprietary (illegitimate) trading bot paying “earlier investors with money obtained from later EmpiresX investors.”
- Crypto Initial Coin Offering Scheme:
United States v. Michael Alan Stollery
Michael Alan Stollery, CEO of Titanium Blockchain Infrastructure Services (TBIS), faces securities fraud charges in the Central District of California. TBIS’s $21 million initial coin offering (ICO) included forged whitepapers and baseless testimonials (on TBIS’ website). Stollery also faked “business relationships with the U.S. Federal Reserve Board, Apple Inc., Pfizer Inc., The Walt Disney Company, and others.
- Crypto Commodities Scheme:
United States v. David Saffron
Circle Society founder David Saffron faces wire and commodities fraud, and justice obstruction indictments. He defrauded on the pretext of investing investors’ monies in a trading bot capable of 17,000 transactions hourly. He fraudulently assured investors a return of 500% to 600% on their investments, raising $12 million. If convicted of all counts, Saffron faces up to 115 years in prison.
