The U.S. Division of Justice (DOJ) has slapped three people with felony fees associated to their alleged involvement in a crypto pyramid scheme that looted $1.89 billion from victims.
Australian native Sam Lee allegedly co-founded “HyperFund,” a web-based funding platform that falsely claimed traders who bought “memberships” would obtain between 0.5% to 1% every day in passive rewards till the corporate both doubled or tripled their preliminary funding.
HyperFund fraudulently claimed the rewards got here from large-scale crypto mining revenues, in line with a brand new press launch from the DOJ. Allegedly, the mining operation didn’t exist, and the platform allegedly began to halt buyer withdrawals in July 2021.
Lee was charged with conspiracy to commit securities fraud and wire fraud and faces a most sentence of 5 years in jail.
The DOJ additionally charged Miami resident Rodney Burton with one depend of conspiracy to function an unlicensed money-transmitting enterprise and one depend of working an unlicensed money-transmitting enterprise. Burton allegedly promoted HyperFund.
One of many platform’s different promoters, Maryland resident Brenda Chunga, pled responsible to conspiracy to commit securities fraud and wire fraud and faces as much as 5 years in jail. Chunga additionally agreed to pay a minimum of $3 million in restitution to victims.
In a parallel motion, the U.S. Securities and Trade Fee (SEC) additionally charged Lee and Chunga with violating the anti-fraud and registration provisions of federal securities legal guidelines.
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