Tag: legal charges

CFTC Charges Four Individuals Behind Alleged Bitcoin Fraud Scheme "Global Trading Club"

The US Commodity Futures Trading Commission filed a civil enforcement action against four individuals for engaging in a fraudulent digital asset scheme.

According to the CFTC’s complaint, filed in the US District Court for The Southern District of Texas, the defendants took place in the fraud scheme to solicit funds from customers to speculate on the future price movements of Bitcoin.

The defendants Rodrigo Jose Castro Molina, Cesar Castaneda, Mayco Alexis Maldonado are based in Texas while Joel Castaneda Garcia in Florida.

Trade Misinvoicing and Illicit Financial Flows

According to the commission, between 2016 August and 2017 October, the defendants falsely stated to potential and actual customers that their business, Global Trading Club (GTC), had employed “master traders” with several years of experience in trading cryptocurrency and with expertise in using professional trading systems (like cutting edge trading robots) to trade Bitcoin for customers.

The CFTC further highlighted that the defendants mislead customers that their earnings would rise if they increased the amounts of their deposits. Customers were also falsely promised bonuses for referring others, in some kind of multi-level marketing scheme. The defendants posted misleading trading statements online so that to conceal their fraudulent activities.

The CFTC claims that the defendants managed to scam more than 27 individuals into depositing over $989,000 with one or more representatives of GTC.  

The CFTC has asked the court to order the defendants to pay civil monetary penalties and disgorge their ill-gotten gains. The commission also seeks a permanent injunction as well as permanent trading and registration bans against violations of The Commodity Exchange Act and the agency’s regulations, as charged.

CFTC Cracks Down on Fraud Crypto Scheme

Cryptocurrency brings a series of problems to retail investors, with the biggest problem associates with the investment and storage process. There are many cases whereby retail investors have been swindled by individuals promising to invest in cryptocurrencies on their behalf.

As part of the ongoing efforts to crack down crime in the crypto industry, the CFTC recently charged Benjamin Reynolds, a man behind a $147 million crypto scheme, for his involvement in a fraudulent crypto Ponzi scheme operating under a Bitcoin trading and investment firm, Control-Finance. The investment company was a crypto scam that managed to lure more than 1000 clients into investing in its bogus Bitcoin products and eventually vanished with investor funds.

Two US Nationals Charged With SIM-Swap Cryptocurrency Theft

The US District Court for the District of Maryland has charged 19-year-old Kyell A. Bryan of Pennsylvania and 21-year old Jordan K. Milleson of Maryland in connection with an alleged phishing fraud and SIM card scheme that led to a theft of thousands of dollars’ worth of cryptocurrency.

According to the US. Attorney for the District of Maryland, Milleson hacked into financial and electronic accounts and computer networks and Bryan participated in helping such deals succeed.

The court documents show that from September 2017 to January 2020, Milleson set up fraudulent websites and internet domains and used phishing techniques to deceive victims into visiting the fraudulent websites and giving their credentials so that he could access their electronic accounts. Bryan and Milleson conspired to take over electronic accounts belonging to people and sent phishing emails to steal cryptocurrencies to enrich themselves.

The court document also alleged that Bryan, Milleson, and others used stolen credentials from employees of wireless service providers to hack into computer networks of those companies and take over customers’ accounts through “SIM swapping”. The culprits used such techniques to give them control over individuals’ phone numbers and other electronic accounts, including social media and cryptocurrency.

In this particular case, Bryan and Milleson reportedly stole over $16,000 from a crypto account after gaining access to the account information of a victim who is an operator of a cryptocurrency investment firm.

The two have been held in custody pending trial. The court charged them with 15 counts, including wire fraud conspiracy, intentional damage to protected computers, wire fraud, aggregated identity, unauthorized access to protected computers to commit fraud, and aggravated identity theft.

If convicted, then Bryan and Milleson face up to 30 years in jail for allegedly stealing cryptocurrency by hacking mobile phones and other electronic accounts and “phishing” emails to steal sensitive or personal information from victims, and other charges leveled against them.

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