An indictment was unsealed yesterday charging the CEO of Mining Capital Coin (MCC), a purported cryptocurrency mining and funding platform, for allegedly orchestrating a $62 million world funding fraud scheme.
“Cryptocurrency-based fraud undermines monetary markets worldwide as unhealthy actors defraud buyers and limits the flexibility of respectable entrepreneurs to innovate inside this rising area,” stated Assistant Legal professional Basic Kenneth A. Well mannered, Jr. of the Justice Division’s Legal Division. “The division is dedicated to following the cash — whether or not bodily or digital — to reveal felony schemes, maintain these fraudsters accountable, and shield buyers.”
Based on the indictment, Luiz Capuci Jr., 44, of Port St. Lucie, Florida, the CEO and founding father of MCC, misled buyers about MCC’s cryptocurrency mining and funding program, beneath which buyers might spend money on MCC by buying “Mining Packages.” Beneath this program, Capuci and his co-conspirators touted MCC’s purported worldwide community of cryptocurrency mining machines as having the ability to generate substantial earnings and assured returns through the use of buyers’ cash to mine new cryptocurrency. Capuci additionally touted MCC’s personal cryptocurrency, Capital Coin, as a purported decentralized autonomous group that was “stabilized by income from the largest cryptocurrency mining operation on the earth.” As alleged within the indictment, nonetheless, Capuci operated a fraudulent funding scheme and didn’t use buyers’ funds to mine new cryptocurrency, as promised, however as an alternative diverted the funds to cryptocurrency wallets beneath his management.
“This workplace is dedicated to defending shoppers from unscrupulous fraudsters in search of to capitalize on the relative novelty of digital forex,” stated U.S. Legal professional Juan Antonio Gonzalez for the Southern District of Florida. “As with every rising market, those that spend money on cryptocurrency should watch out for profit-making alternatives that seem too good to be true.”
The indictment additional alleges that Capuci touted and fraudulently marketed MCC’s purported “Buying and selling Bots” as a further funding mechanism for buyers to spend money on the cryptocurrency market. Capuci claimed that MCC joined with “high software program builders in Asia, Russia, and the united statesA. to create an improved model of Buying and selling Bot[s] that [were] examined with new know-how by no means seen earlier than.” Capuci additional represented that MCC’s Buying and selling Bots operated in “very excessive frequency, having the ability to do 1000’s of trades per second,” and that every of MCC’s Buying and selling Bots would generate day by day returns for buyers. As he did with the Mining Packages, nonetheless, Capuci allegedly operated an funding fraud scheme with the Buying and selling Bots and was not, as he promised, utilizing MCC Buying and selling Bots to generate revenue for buyers, however as an alternative was diverting the funds to himself and co-conspirators.
“Digital forex markets are rising quickly, and sadly so are crypto forex funding scams,” stated Assistant Director Luis Quesada of the FBI’s Legal Investigative Division. “The FBI and our regulation enforcement companions are dedicated to investigating monetary fraud wherever it happens, together with within the digital forex area.”
Capuci can also be alleged to have recruited promoters and associates to advertise MCC and its numerous funding applications by a multi-level advertising and marketing scheme, generally often called a pyramid scheme. For efficiently luring buyers to take a position, Capuci promised MCC’s community of promoters and associates a variety of presents, from Apple watches and iPads to luxurious automobiles similar to a Lamborghini, Porsche, and even Capuci’s private Ferrari. Capuci additional hid the situation and management of the fraud proceeds obtained from buyers by laundering the funds internationally by numerous foreign-based cryptocurrency exchanges.
“This case ought to function a warning to any people who look to illegally capitalize on the perceived ambiguity of the rising crypto market to benefit from harmless buyers” stated HSI Miami Particular Agent in Cost Anthony Salisbury. “HSI will proceed to work with our companions to pursue anybody who makes use of a lot of these schemes to victimize could be prospects.”
Capuci is charged with conspiracy to commit wire fraud, conspiracy to commit securities fraud, and conspiracy to commit worldwide cash laundering. If convicted of all counts, he faces a most whole penalty of 45 years in jail. A federal district court docket decide will decide any sentence after contemplating the U.S. Sentencing Pointers and different statutory elements.
The FBI Miami Area Workplace and HSI’s Miami Area Workplace are investigating the case.
Trial Attorneys Kevin Lowell and Sara Hallmark of the Legal Division’s Fraud Part and Assistant U.S. Legal professional Yisel Valdes of the Southern District of Florida are prosecuting the case.
An indictment is merely an allegation, and the defendant is presumed harmless till confirmed responsible past an inexpensive doubt in a court docket of regulation.