In brief
- Three men used a religious cover to defraud investors in the US, the SEC alleged.
- They made away with over $28 million using a Ponzi scheme involving cryptocurrencies, according to the complaint.
- Illicit investment scams show no signs of stopping in the crypto industry.
Three conmen posed as religious and government workers to pitch a crypto investment scam that raised $27 million from unsuspecting church-goers and other hopeful investors in the US, alleged the US Securities and Exchange Commission in a federal complaint released on Friday.
The SEC alleges that Dennis Mbongeni Jali, John Erasmus Frimpong ad Arley Ray Johnson lured victims, among them Maryland church pastors, church-goers and doctors, with a crypto trading bot that would net them high-interest rates on their investments.
To recruit their targets for the so-called "1st Million" company, the three men attended church functions and portrayed themselves as “more interested in the philanthropic financial freedom of others than personal financial gain,” said court documents.
“The three men presented themselves as ‘pastors’ and told prospective investors that “1st Million’s” work was in furtherance of God’s mission in that it helped churches and their members achieve personal wealth and financial freedom,” the complaint said.
But instead of making good on their promise to customers and helping with charitable causes, the trio was running a Ponzi scheme, alleged the SEC. They used funds raised from newer investors to pay off older investors—that would make it look like the trading bot actually worked—and used the rest of the money to fund a lavish lifestyle that included luxury cars, private jets, and family vacations, said the SEC.
Bitcoin giveaways, other scams pull in $24 million so far this year
Crypto criminals are stealing more money than ever—and they’re not even trying very hard. In the first six months of 2020 alone, $24 million in Bitcoin was bagged by scammers, according to a report released today by blockchain tracking and analytics provider Whale Alert. It’s the first report from a new “blockchain crime reporting, tracking, and analysis tool” called “Scam Alert” that the firm launched two weeks ago. 🚨🚨🚨 Scam Alert has been online for a few weeks now and we have written a s...
Investigators said the men raised over $28 million from over 1,200 investors using the scheme from 2017 to mid-2019. At press time, the 1st Million perpetuators await trial in the US for defrauding investors, the complaint said.
Alleged million-dollar scam hurts investors in Thailand
The Department of Special Investigation (DSI) in Thailand is investigating an alleged pyramid scheme that sucked in 75 million baht, worth $2.47 million. According to local reports, Phadungsak Tienpairoj, a lawyer and the leader of a local human rights foundation, brought 20 of its victims to the DSI on Wednesday to complain. Police captain Thas Laothawee, deputy director of the Bureau of Illegal Financial Business Crime, said the DSI “is looking into the case.” The cryptocurrency scheme in ques...
The alleged scam is similar to Bitconnect’s now-busted 10% monthly payout promise to its investors in 2018. Another ongoing Ethereum-based Ponzi scheme, called Forsage, also uses the same narrative—that of promising massive crypto returns using a smart contract trading bot.
But while Bitconnect faced legal action in the US and was swiftly shut down by authorities in 2018, Forsage continues to be alive and well, despite facing court action in the Philippines. Investors are not Forsage’s only victims, however. The illicit firm has clogged up the Ethereum network and is the second-highest Gas guzzler as per tracking site ETH Gas Station.
