The Securities and Exchange Commission (SEC) has filed charges against 17 individuals associated with CryptoFX LLC, a Texas-based company, for orchestrating a Ponzi scheme that amassed $300 million.
The scheme targeted over 40,000 investors, predominantly from the Latino community, across the United States and two other countries.
This legal action by the SEC follows an emergency intervention in September 2022, which initially disrupted the fraudulent operation and charged the main operators of the firm, Mauricio Chavez and Giorgio Benvenuto.
The Ponzi scheme operated from May 2020 to October 2022 and involved individuals from various states including Texas, California, Louisiana, Illinois, and Florida, who served as leaders of the CryptoFX network.
Investors were promised returns ranging from 15 to 100 percent through crypto asset and foreign exchange trading. However, the SEC alleges that the majority of the funds were not used for trading but instead diverted to pay earlier investors and for personal enrichment, including commissions and bonuses for the defendants.
The complaint further reveals that even after court orders were issued to halt the scheme, two defendants, Gabriel and Dulce Ochoa, continued to solicit investments. Gabriel Ochoa even instructed investors to withdraw their SEC complaints in an attempt to recover their investments. Another defendant, Maria Saravia, allegedly misled investors by claiming that the SEC’s lawsuit was fabricated.
The SEC’s charges against the defendants include violations of antifraud, securities registration, and broker registration provisions of federal securities laws. Additionally, Gabriel Ochoa is charged with violating whistleblower protection provisions. The SEC is seeking permanent injunctions, disgorgement with prejudgment interest, and civil penalties against each defendant.
Two of the charged individuals, Luis Serrano and Julio Taffinder, have consented to final judgments without admitting or denying the allegations. They agreed to be permanently restrained from violating securities registration and broker registration provisions and to pay a combined total of over $68,000 in penalties, disgorgement, and interest.
The SEC’s investigation, led by the Fort Worth Regional Office, is ongoing as they pursue justice for the victims.
This case underscores the risks associated with unregistered investment offerings and emphasizes the importance of verifying the legitimacy of investment opportunities.
