All posts tagged: defrauding

Pastor Accused of Defrauding Investors of M Via Crypto Scheme Says He Got Help From ‘The Lord’

Pastor Accused of Defrauding Investors of $3M Via Crypto Scheme Says He Got Help From ‘The Lord’

DENVER (AP) — A Colorado pastor for an online church who is accused of defrauding investors of more than $3.2 million through a cryptocurrency marketplace he ran with his wife says “the Lord” helped him orchestrate the venture. Colorado’s securities commissioner filed civil fraud charges against Eli Regalado and his wife Kaitlyn Regalado, saying the Denver couple targeted the Christian community and told followers that God would make them rich if they invested in a cryptocurrency he created called INDXcoin. Investigators with the Colorado Division of Securities found that from June 2022 to April 2023, INDXcoin raised about $3.2 million from more than 300 people who invested in the “illiquid” and “essentially worthless” currency, according to the complaint filed Jan. 16. Investigators said the Regalados, who ran a cryptocurrency marketplace called the Kingdom Wealth Exchange, used at least $1.3 million of those funds to support a lavish lifestyle that included tens of thousands of dollars spent on vacations, jewelry, luxury handbags, cosmetic dentistry, clothes and home renovations. The two, who shut down the exchange Nov. …

Sam Bankman-Fried found guilty of defrauding FTX customers out of billions | Sam Bankman-Fried

Sam Bankman-Fried, the founder of now-bankrupt crypto exchange FTX, was found guilty on all counts of defrauding his customers on Thursday in Manhattan federal court. The one-time mogul was found guilty on seven counts of wire fraud and conspiracy to launder money. He faces decades in prison at a sentencing hearing that US district Judge Lewis Kaplan set for 28 March 2024. The verdict, reached after just four hours of jury deliberation, brought an end to nearly a month of court proceedings that featured stunning testimony from his closest allies and the disgraced entrepreneur himself. He maintained his innocence until the end. “We respect the jury’s decision. But we are very disappointed with the result. Mr Bankman-Fried maintains his innocence and will continue to vigorously fight the charges against him,” read a statement from Mark Cohen, Bankman-Fried’s lawyer. Bankman-Fried was accused of swindling FTX customers out of some $10bn. Prosecutors said that his fraud extended from 2019 to November 2022, when FTX collapsed under the weight of a liquidity crisis, caused by the lending of …

NY Attorney General sues Gemini, Genesis and DCG for allegedly defrauding crypto investors of over B

NY Attorney General sues Gemini, Genesis and DCG for allegedly defrauding crypto investors of over $1B

New York Attorney General Letitia James filed a lawsuit against three crypto companies: Gemini Trust Company, Genesis Global Capital and its affiliates and Digital Currency Group (DCG) for allegedly defrauding investors of over $1 billion, according to a statement on Thursday. The lawsuit also brought charges against Genesis former CEO Soichiro “Michael” Moro and DCG’s founder and CEO Barry Silbert for trying to hide $1.1 billion losses and “defrauding investors and the public.” About 230,000 investors were affected by the three firms, the government’s statement alleges. The investigation claims that Gemini lied to investors about its investment program, Gemini Earn, by calling it a “low-risk investment,” when it wasn’t. “The lawsuit alleges that Gemini knew Genesis’ loans were undersecured and at one point highly concentrated with one entity, Sam Bankman-Fried’s Alameda, but did not reveal this information to investors,” the agency stated. “This fraud is yet another example of bad actors causing harm throughout the under-regulated cryptocurrency industry,” James said in a statement. In June 2022, one of Genesis’ largest borrowers, crypto hedge fund Three …

SEC charges founder of financial aid startup Frank with defrauding JPMorgan

SEC charges founder of financial aid startup Frank with defrauding JPMorgan

The U.S. Securities and Exchange Commission has charged Charlie Javice, the founder of student financial aid startup Frank, with fraud in connection with the $175 million sale of the company to JPMorgan Chase Bank in 2021.  JPMorgan filed a lawsuit against Javice in December, alleging that she had helped “fake millions of customers in order to induce the bank to buy her company.” That charge is the root of the SEC’s complaint today, which charges that Javice “made numerous misrepresentations” about Frank’s purported millions of users to entice JPMorgan. The complaint alleges that as talks between the two parties progressed, JPMorgan pressed Frank executives for data associated with its customers. Javice allegedly sought the help of Frank’s director of engineering to generate synthetic data to make it appear as if Frank had 4.25 million customers. And when that director refused to cooperate, Javice then allegedly paid a data science professor $18,000 to manufacture the data “required to close the deal.” The young entrepreneur denies those claims and in turn filed her own suit against the …

SEC charges Terraform Labs and founder Do Kwon with defrauding investors

SEC charges Terraform Labs and founder Do Kwon with defrauding investors

The US Securities and Exchange Commission has charged the collapsed blockchain firm and stablecoin operator Terraform Labs and its founder Do Kwon with defrauding U.S. investors who purchased the digital assets Terra USD and Luna. The US financial regulator accused Kwon and the Singpoare-based crypto firm of offering and selling an inter-connected suite of crypto asset securities, “many in unregistered transactions” from April 2018 to May 2022. The SEC also alleged in federal court that the firm and its founder misrepresented the stability of Terra USD, a stablecoin developed by Kwon, which was supposed to maintain its 1-to-1 peg to the U.S. dollar through its sister token Luna. Kwon and Terraform also misled investors with false statements about the Korean mobile payment app Chai when they claimed Chai used Terraform to settle transactions, according to the filing (PDF) in the federal court. But in fact, Chai payments did not use the Terraform blockchain to process payments, according to the lawsuit. The collapse of UST in 2022 led to the wiping out of at least $40 …

New York Attorney General sues former Celsius CEO for defrauding crypto investors

New York Attorney General sues former Celsius CEO for defrauding crypto investors

New York Attorney General Letitia James filed a lawsuit against Alex Mashinsky, co-founder and former CEO of Celsius Network, according to an announcement on Thursday. James alleged that Mashinsky defrauded “hundreds of thousands of investors…out of billions of dollars worth of cryptocurrency.” The lawsuit also claims that Mashinsky “repeatedly made false and misleading statements about Celsius’s safety to encourage investors to deposit billions of dollars in digital assets onto the platform.” Celsius, which was once one of the world’s largest crypto lenders, filed for bankruptcy protection in mid-July 2022. At the time, Celsius said it had anywhere between $1 billion and $10 billion in assets and liabilities and more than 100,000 creditors. Prior to filing for bankruptcy, Celsius froze withdrawals for customers in June citing “extreme market conditions.” That freeze never lifted. Celsius lost hundreds of millions of dollars of assets through risky investments and Mashinsky misrepresented and hid Celsius’ financial condition, the AG office stated. Additionally, Mashinsky failed to register as a salesperson for the platform and as a securities and commodities dealer, it …

SEC, CFTC and SDNY attorney’s office charge FTX’s Sam Bankman-Fried with defrauding investors

SEC, CFTC and SDNY attorney’s office charge FTX’s Sam Bankman-Fried with defrauding investors

The U.S. Securities and Exchange Commission (SEC) has officially charged disgraced FTX founder Sam Bankman-Fried (aka SBF) with defrauding investors, it revealed on Tuesday morning follwing his arrest in the Bahamas. The SEC said in a press release that in addition to being charges with fraud regarding equity investors in FTX, he’s also being investigated regarding other securities law violations — and noted that there are ongoing investigations pending against others involved as well. The SEC isn’t the only one getting a hand on this ball, however: Both the Southern District of New York’s Attorney’s office and the Commodity Futures Trading Commission (CFTC) also filed charges against SBF in “parallel actions.” The complaint from the U.S. securities regulator alleges that while Bankman-Fried presented FTX as “a safe, responsible crypto asset trading platform,” in reality the founder sometimes described as ‘crypto’s white knight’ was engaged in a “years-long fraud” designed to hide from FTX investors the fact that their funds were being redirected to SBF’s Alameda crypto hedge fund, while Alameda enjoyed a kind of favored status …