Six charged With Crypto Fraud Offenses by DOJ.

Written by Mike Boutwell

August 22, 2022

The Department of Justice has stated that the cases involve cryptocurrency-related fraud, a fraudulent investment fund traded on cryptocurrency exchanges, a global Ponzi scheme including the sale of unregistered cryptocurrency securities, and a fraudulent initial coin offering.

The following are the four charges that were announced:

Crypto NFT Scheme: United States v. Le Ahn Tuan

According to the agency, Tuan, a Vietnamese national who is 26 years old, was charged in the Central District of California with one count of conspiracy to commit wire fraud and one count of conspiracy to commit international money laundering. Both of these charges stem from the same incident.

An NFT investment endeavor is known as the “Baller Ape Club,” in which he participated entailed selling NFTs in the form of cartoon figures, most frequently in the form of an ape. The Department of Justice (DOJ) claimed that after the NFTs were sold, Tuan and his co-conspirators put an end to the investment project, erased its website, and stole the money from the investors. This action is referred to as a “rug pull.”

The monies would then be “washed” using a process known as “chain-hopping,” when one type of coin is transformed into another, and the money is transferred across various cryptocurrency blockchains. Tuan and his fellow conspirators utilized this process. According to the Department of Justice, they used swap services to cover their tracks after stealing money from investors.

According to the department’s investigation, Tuan and his co-conspirators stole around $2.6 million from several investors. If found guilty of all charges, the maximum sentence that could be imposed on Tuan is forty years in jail.

According to the Department of Justice (DOJ), Pires, 33, Goncalves, 33, both of whom are from Brazil, and Nicholas, 28, who is from Florida, were each charged in the Southern District of Florida with one count of conspiracy to commit wire fraud and one count of conspiracy to commit securities fraud. Pires and Goncalves were both from Brazil. Nicholas was from Florida. Additionally, charges of conspiracy to commit international money laundering have been brought against Pires and Goncalves.

According to the department’s statement, the three are being accused in connection with a global Ponzi scheme based on cryptocurrencies that generated around $100 million from investors. They promoted the cryptocurrency investment platform, which offered unregistered securities, by creating falsifications about a trading bot and promising returns to investors and possible EmpiresX investors. According to the allegations, Pires and Goncalves were the founders of EmpiresX, and Nicholas was the “Head Trader.” After that, according to the DOJ, they engaged in money laundering by using an overseas cryptocurrency exchange and ran a Ponzi scheme by paying earlier investors with the money received from later investors.

If found guilty on all charges, Pires, Goncalves, and Nicholas could be sentenced to between 25 and 45 years in prison, according to the Department of Justice (DOJ).

United States v. David Saffron

Saffron, who was 49 years old and originally from Nevada, was Circle Society’s proprietor, an investing platform for cryptocurrencies. He was charged with one crime of conspiracy to commit wire fraud, four counts of wire fraud, one count of conspiracy to commit commodities fraud, and one count of obstruction of justice in the Central District of California.

According to the government, Saffron used the platform to solicit contributions from investors for participation in an unregistered commodity pool. This pool aggregated the funds contributed by investors and used them to trade on futures and commodity markets. He informed the investors that he had used an investor bot that was able to complete more than 17,000 transactions per hour on a variety of exchanges in order to trade their funds in order to gain money for himself.

He assured investors that they would receive 500 and 600 percent returns from investing in this venture. According to the DOJ, in order to entice potential investors, Saffron hosted investor meetings in luxurious houses, including one in the Hollywood Hills, and traveled with phony security guards to give the impression that he had a significant amount of wealth.

Investors provided him with approximately 12 million dollars. According to the Department of Justice, the highest possible sentence for Saffron if she is found guilty on all counts is 115 years in jail.

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