US Justice Department uncovers $1.89 billion cryptocurrency fraud scheme
finextra.comSam Lee, 35, an Australian citizen residing in Dubai was charged for allegedly co-founding 'too-good-to-be-true' online investment platform HyperFund. Rodney Burton, 54, of Miami, and Brenda Chunga, 43, of Maryland, were promotors of HyperFund.
According to court documents, HyperFund’s promotional materials allegedly made various false claims, including that investors who purchased HyperFund “memberships” would receive between 0.5% to 1% daily in passive rewards until the company either doubled or tripled the investor’s initial investment.
To convince investors that it could make such payments, HyperFund allegedly claimed that its payments would be disbursed in part from its revenues from large-scale crypto mining operations, when in truth, HyperFund did not have such operations.
Beginning in at least July 2021, HyperFund allegedly began to block investor withdrawals.
“The level of alleged fraud here is staggering,” says U.S. Attorney Erek L. Barron for the District of Maryland.
“Whether it’s cryptocurrency fraud, or any other financial frauds, if it sounds too good to be true, it probably is. This office and our law enforcement partners will hold perpetrators accountable for these and other fraud schemes.”
Lee is charged with one count of conspiracy to commit securities fraud and wire fraud. If convicted, he faces a maximum penalty of five years in prison.
Burton is charged by criminal complaint with one count of conspiracy to operate an unlicensed money transmitting business and one count of operating an unlicensed money transmitting business. He also faces a maximum penalty of five years in prison on each count.
Chunga pleaded guilty to one count of conspiracy to commit securities fraud and wire fraud and faces a maximum
