Investors lured into the scheme with fake promises
The Justice Department charged two individuals and the guilty plea of a third individual for orchestrating a $1.89 billion cryptocurrency fraud scheme named HyperFund. The three defendants are said to be charged with defrauding investors to the tune of $1.89 billion. They lured the investors into the scheme with unrealistic promises and said they would receive substantial returns from cryptocurrency mining operations.
From June 2020 to November 2022, Lee and the duo offered and sold investment contracts to the victims through HyperFund’s online investment platform. The scheme’s promotional materials made false claims that were too good to be true. It claimed that investors who purchased HyperFund “memberships” would receive between 0.5% to 1% daily in passive rewards until the company either doubled or tripled the investor’s initial investment. It was also reported that beginning in July 2021, HyperFund began to block investor withdrawals.
The three behind the Hypercapital scheme
Sam Lee, an Australian citizen residing in Dubai was charged for co-founding HyperFund. It also went by the names HyperTech, HyperCapital, HyperVerse, and HyperNation. Rodney Burton of Miami and Brenda Chunga of Maryland were found to be the main promoters of HyperFund.
Criminal charges
Lee is charged with one count of conspiracy to commit securities fraud and wire fraud. Burton is charged with a criminal complaint of operating an unlicensed money-transmitting business and one count of operating an unlicensed money-transmitting business. While Chunga pleaded guilty to committing securities fraud and wire fraud. The three can face a maximum penalty of five years in prison.
Conclusion
“We are committed to uncovering sophisticated frauds involving cryptocurrency and digital assets and bringing those who perpetrate them to justice,” said Assistant Attorney Nicole M. Argentieri. The officers warned that the level of alleged fraud here is staggering. They said whether it’s cryptocurrency fraud or any other financial fraud, if it sounds too good to be true, it probably is. “This office and our law enforcement partners will hold perpetrators accountable for these and other fraud schemes,” they further boasted.
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