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Tuesday, December 06, 2022

USA warns of pyramid scam targeting Latino investors

Estados Unidos advierte sobre estafa piramidal que apunta a inversores latinos

The Securities and Exchange Commission (SEC, for its acronym in English) submitted an emergency action to justice to prevent fraudulent crypto asset offerings CryptoFX, LLC, It is an unregistered maneuver aimed at Latino investors and suspected fraud.

defendants are Welcome Mauricio Chavez and Giorgio which, according to the SEC, operates through a company founded by Chavez, CryptoFX, LLC,

Like Leonardo Cosciorto in Argentina, Chávez presented himself as a man ready to help, to teach people something new. In this case, he claimed to be a cryptocurrency expert who would lead Latin investors to financial success. He claimed to make millionaires who followed his advice.

But for the SEC, What he did was defraud some 5,000 savers who entrusted him with their money., Chavez allocated much of that capital to his own investments, such as the purchase of a house, jewelry, a car, and personal expenses.

At the request of the SEC, the court halted the offering, issuing a temporary asset freeze order and other emergency measures. After a hearing last Thursday, September 29, the court also approved the SEC’s proposal for a receiver and extended the asset freeze.

Details of alleged scam

The protagonist of this story is 41 years old and lives in Houston, Texas. In fact, he had no experience or training in the world of crypto assets. Even then, In 2020 they began offering paid classes (at a cost of $500 to $1,500 per course) aimed at educating and training the Latino community., He offered them to be the one who inspired them to create wealth through investing in crypto assets.

According to the SEC indictment, he provided investors with false documents that, among other things, exaggerated their crypto experience and guaranteed they would not be harmed. their courses were held in different places Texas, California, Illinois, North Carolina and Louisiana,

The lawsuit argues that the seminar was nothing more than urging investors to give their money to Crypto FX. They were the funds that the defendants were supposed to use to invest in crypto assets and currencies.

As alleged, Chavez claims that, among other things, he has made impressive profits and has literally earned “Over five millionaires last year”, It promised potential profit from 90% in six months. The defendants raised more than $12 million from more than 5,000 investors.,

The SEC alleges that Chavez was actually running a Ponzi scheme, a pyramid scheme. Of the 12 million, Chavez and his partner Benvenuto actually invested only one million in crypto assets. a portion of money, some 2.7 millionused it to pay false returns to some investors. In this way he made his story more believable, but behind it was the classic pyramidal mechanism.

The bulk of the money went into real estate investments, including a house named after Chavez’s wife, which he bought. $540,000, For his part, 55-year-old Benvenuto allegedly asked a large investor to enter the scheme and diverted the investors’ money to himself and a company and CBT Group owned by Chavez.

life of luxury

SEC notes that Chavez spent approx. $1.5 million to lead a great quality of life,

  • 460 thousand dollars to invest in cars.
  • 267 thousand in credit card payments.
  • 196 thousand in purchases.
  • 186 thousand (5 star hotel where he lived) in Post Oak Hotel.
  • 110 thousand in the journey.
  • 101 thousand in the restaurant
  • 19 thousand more in jewellery.
  • 15 thousand in clubs by turn.
  • $30,000 to buy a hair salon in Houston.

The commission’s suit, filed in Texas Southern District Court, accuses Chavez, Benvenuto and CryptoFX of violating, or violating and violating the anti-fraud provisions of various laws.

SEC seeks permanent injunction, civil penalty and refund of unfair earnings, including interest, as well as the prohibition that Chavez and Benvenuto hold positions or act as directors of any listed company.

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