WASHINGTON D.C. - The Securities and Exchange Commission (SEC) has charged 17 individuals connected to CryptoFX LLC, a Texas-based company, for orchestrating a Ponzi scheme that amassed $300 million by defrauding over 40,000 investors, primarily within the Latino community. The SEC's legal action, announced today, follows an emergency intervention in September 2022 that initially disrupted the fraudulent operation and charged the firm's main operators, Mauricio Chavez and Giorgio Benvenuto.
The scheme, which ran from May 2020 to October 2022, involved individuals from Texas, California, Louisiana, Illinois, and Florida, who acted as leaders of the CryptoFX network. They allegedly promised investors returns of 15 to 100 percent through crypto asset and foreign exchange trading. However, the SEC's complaint alleges that the majority of the funds were not used for trading but were instead diverted to pay earlier investors and for personal enrichment, including commissions and bonuses for the defendants.
The complaint also details that two defendants, Gabriel and Dulce Ochoa, continued to solicit investments even after the court's orders to halt the scheme, with Gabriel Ochoa instructing investors to withdraw their SEC complaints to recover their investments. Another defendant, Maria Saravia, is alleged to have misled investors by claiming that the SEC's lawsuit was a fabrication.
The SEC's charges against the Ochoas, Saravia, and other defendants include violations of antifraud, securities registration, and broker registration provisions of federal securities laws. Additionally, Gabriel Ochoa is charged with violating whistleblower protection provisions. The SEC is seeking permanent injunctions, disgorgement with prejudgment interest, and civil penalties against each defendant.
Two of the charged individuals, Luis Serrano and Julio Taffinder, without admitting or denying the allegations, have consented to final judgments that enjoin them from future violations of the pertinent securities laws and have agreed to pay a combined total of over $68,000 in penalties, disgorgement, and interest.
The SEC's investigation, led by the Fort Worth Regional Office, continues as they conduct litigation seeking justice for the victims. This case serves as a reminder of the risks associated with unregistered investment offerings and the importance of verifying the legitimacy of investment opportunities.
The information in this article is based on a press release statement from the Securities and Exchange Commission.
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