US accuses 2 Brazilians of operating cryptocurrency financial pyramid – News

Two Brazilians were accused of fraud in the US for a financial pyramid scheme involving cryptocurrencies and would have left R$530 million (US$100 million) in losses. Emerson Sousa Pires and Flavio Mendes Gonçalves, with American Joshua David Nicholas, are being investigated for allegedly embezzling millions of dollars from investors.

The case was denounced this Friday (1st) by the US Department of Justice and capital market regulators, such as the SEC (Securities and Exchange Commission) and the CFTC (Commodity Futures Trading Commission). The investigation also involves the FBI and the US Homeland Security Investigations Agency, HSI.

The Brazilians, both 33 years old and appointed as founders of EmpiresX, would have returned to Brazil at the beginning of the year, after the outbreak of the scheme. American Joshua David Nicholas, 28, is introduced as the company’s trading director. The report was unable to contact the accused.

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According to the indictment, the scheme began in mid-2020 — based on the promise of 1% a day profits from a cryptocurrency investment robot — and raised about $40 million from investors, according to the SEC.

“Defendants allegedly misappropriated large sums of money from investors to rent a Lamborghini, shop at Tiffany & Co., make a down payment on a second home and more,” the SEC said in a statement yesterday.

Both the SEC and the US Justice list a series of accusations against Brazilians and the American, which include false information to investors, submission of documents to regulatory bodies, licenses to operate, in addition to offers of unregistered securities.

“Defendants allegedly engaged in an unregistered offering with a series of fraudulent statements designed to lure investors with the prospect of steady daily profits,” says Acting Head of the SEC Enforcement Division’s Cyber ​​and Assets Unit Carolyn Welshhans.

From a jury in the Southern District of Florida, Pires and Gonçalves were also indicted for conspiracy to commit international money laundering.

Other accusations

It is not the SEC’s first action against one of the alleged fraudsters. In May of this year, the US capital market regulatory agency had already accused Pires of applying, alongside his partner at Mining Capital Coin, Luiz Carlos Capuci Júnior, a global coup, also in the cryptocurrency universe.

If convicted on all counts, Pires and Gonçalves face up to 45 years in prison, and Nicholas faces up to 25 years, according to the US court. In the same statement that accused the Brazilians, the agency also announced the indictment of a total of six people, in four cases for alleged involvement in cryptocurrency-related fraud.

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