SEC Charges Four Individuals With Cryptocurrency Scheme Targeted At Spanish-Speaking Investors, Including In Florida
On December 14th, 2022, the Securities and Exchange Commission (SEC) charged four people as part of a cryptocurrency securities fraud scheme that was allegedly targeted at Spanish-speaking investors, including investors in Florida. The following individuals were named as part of the nearly $10 million investment fraud scheme:
- Francisley Valdevino Da Silva;
- Juan Antonio Tacuri Fajardo;
- Ramon Antonio Perez Arias; and
- Jose Ramiro Coronado Reyes.
The complaint was filed in the United States District Court for the Southern District of New York. The defendants stand accused of enticing investors with false promises of guaranteed returns. However, the SEC alleges that the company had no real assets. In this article, our Miami investment fraud attorney discusses the civil charges leveled by the SEC.
Securities Fraud Complaint: Cryptocurrency Company Functioned as Pyramid-Scheme
According to the allegations raised by the SEC, the primary promotor of the cryptocurrency-related investment fraud scheme was Francisley Valdevino Da Silva, a national of Brazil. The other three individuals named as defendants are all from the United States. Between the summer of 2017 and the winter of 2020, the defendants raised nearly $8.5 million from retail investors.
The SEC alleges that the defendants focused on recruiting Spanish-Speaking investors—mainly from New York and Florida—to buy a membership in their company Forcount Trader Systems. The membership gave investors access to the company’s “profits.” These profits were purportedly generated from cryptocurrency trading and mining operations. Notably, investors were promised guaranteed, above-market returns.
Investors were also incentivized to sell membership to new investors as part of a referral program. In reality, the SEC contends that the entire business model was about the selling of this membership. Indeed, the SEC alleges that the company had no cryptocurrency assets at all. Funds from investors were shuffled around and siphoned off. The defendants used investor funds to support their lavish lifestyle, including purchasing high-end cars, expensive homes, and other luxury goods.
Understanding Pyramid Schemes and Investment Fraud
Sharing many similarities with a Ponzi scheme, a pyramid scheme is a form of investment fraud whereby each person involved “recruits” others to join. Money made by the new members funnels up to the higher members. It is called a “pyramid” because it typically takes the shape of a pyramid, with the top layer having one person, the next layer having two people, the next four, and so on. The scheme relies on an ever-increasing number of recruits to bring in money, but eventually, the scheme collapses because there aren’t enough new members to support the upper layers.
Consult With an Investor Losses Attorney in Southeastern Florida
At Carlson & Associates, P.A., our Florida law firm is committed to protecting the rights and interests of investors. If you sustained significant financial losses in an investment fraud scheme, including a cryptocurrency fraud scheme, we are here to help. Contact us today to arrange your confidential initial legal consultation. From our Miami office location, we advocate tirelessly for investors.
Source:
sec.gov/news/press-release/2022-227
