Key Takeaways
- They are accused of misleading investors into believing their funds would be invested in crypto and other assets when they were not
- Charges leveled by the SEC include fraud, failure to register securities, failure to register as brokers, and failure to protect whistleblowers.
The U.S. Securities and Exchange Commission (SEC) has taken legal action against 17 individuals allegedly involved in a $300 million Ponzi scheme. This scheme targeted primarily Latino investors across the U.S. and two other countries.
Operating out of Houston, Texas, the scheme promised substantial returns through “risk-free” and “guaranteed” crypto and foreign exchange investments. Over 40,000 investors in 10 states and two foreign nations were affected by the deceptive practices, according to the SEC.
This SEC action follows its previous intervention in September 2022. Back then, operations of CryptoFX, the scheme at the center of the allegations, were halted. Key figures, Mauricio Chavez and Giorgio Benvenuto, were implicated in the process.
The SEC has filed charges against the 17 individuals. They are accused of misleading investors into believing their funds would be invested in crypto and other assets when they were not. Gurbir Grewal, the director of the SEC’s Division of Enforcement, stated that the scheme promised “life-altering wealth” to victims. However, it left a trail of thousands of victims across multiple states and countries.
The charges leveled by the SEC include fraud, failure to register securities, failure to register as brokers, and failure to protect whistleblowers. Two of the defendants, Luis Serrano and Julio Taffinder, have agreed to settlements without admitting or denying guilt. They have agreed to pay over $68,000 in penalties, disgorgement, and interest.
The SEC’s investigation revealed that CryptoFX was allegedly orchestrated by individuals from Texas, California, Louisiana, Illinois, and Florida. The scheme enticed investors with promises of returns ranging from 15% to 100%. However, the funds were misappropriated for personal use. Notably, Mauricio Chavez and Giorgio Benvenuto were previously charged in an emergency action by the SEC last October.
Thursday’s filing expands the number of defendants. It alleges that at least two of them, Gabriel and Dulce Ochoa, continued soliciting investors even after the SEC’s initial action in 2022. CryptoFX, registered as a crypto trading platform in Houston in February 2020, had its operations halted by the SEC in September 2022.
