The Securities and Exchange Commission (SEC) recently charged
17 perpetrators for their roles in a $300 million Ponzi scheme targeting more
than 40,000 investors, mostly of Latino heritage, in three countries. The
scheme involved a Houston-based crypto firm, which was ordered by a Texas
district court in September 2022 to cease and desist its illegal activities.
CryptoFX, LLC and its two main principals – Mauricio Chavez
and Giorgio Benvenuto – were the subjects of SEC’s successful emergency
action in September 2022 that halted the CryptoFX scheme and charged Chavez
and Benvenuto.
The SEC’s complaint claims CryptoFX purported to engage in
trading activities on crypto asset markets and foreign exchange markets on
behalf of investors. From May 2020 to October 2022, the crypto firm allegedly solicited
investors by promising that its crypto asset and foreign exchange trading would
generate returns of 15 percent to 100 percent.
However, despite promising investors “risk-free” and
“guaranteed” crypto investments, the SEC found that the 17 individuals used the
investors’ funds to pay commissions and bonuses to themselves and other
investors, rather than for trading purposes.
“We allege that CryptoFX was a $300 million Ponzi scheme
that targeted Latino investors with promises of financial freedom and
life-altering wealth from ‘risk free’ and ‘guaranteed’ crypto and foreign
exchange investments,” SEC Enforcement Director Gurbir Grewal said in a press
release. “In the end, the only thing that CryptoFX guaranteed was a trail of
thousands upon thousands of victims stretching across 10 states and two foreign
countries. A scheme of that size requires lots of participants, and as today’s
action demonstrates, we will pursue charges against not just the principal
architects of these massive schemes, but all those who further their fraud by
unlawfully soliciting victims.”
The complaint further alleges that two defendants, Gabriel
and Dulce Ochoa, continued to solicit investments after CryptoFX was
court-ordered to stop doing so in September 2022. Gabriel Ochoa reportedly told
two investors that the only way to recover their investments was to rescind
their complaints with the SEC. Another defendant, Maria Saravia, allegedly told
investors that the SEC’s lawsuit was fake.
“After filing the initial charges in this case and obtaining
emergency relief, we continued our investigation to identify additional
individuals who allegedly played roles in this massive Ponzi scheme,” SEC Fort
Worth Regional Office Director Eric Werner said in the release. “Our efforts
bore significant fruit as the charges and allegations today demonstrate.”
The SEC’s complaint, filed in U.S. District Court for the
Southern District of Texas, charges the Ochoas, Saravia, Gloria Castaneda,
Ismael Zarco Sanchez and Roberto Zavala with violating the antifraud,
securities-registration and broker-registration provisions of federal
securities laws. Additionally, the complaint charges Gabriel Arguelles, Hector
Aquino, Orlin Wilifredo Turcios Castro, Carmen De La Cruz, Elizabeth Escoto,
Reyna Guiffaro, Marco Antonio Lemus, Juan Puac, Luis Serrano, Julio Taffinder and
Claudia Velazquez with violating the securities-registration and
broker-registration provisions. Gabriel Ochoa was also charged with violating
the whistleblower protection provisions. The SEC seeks permanent injunctions,
disgorgement with prejudgment interest and civil penalties against each
defendant.
Without admitting or denying the SEC’s claims, Serrano and
Taffinder consented to the entry of final judgments, subject to court approval,
that permanently restrain and enjoin them from violating the
securities-registration and broker-registration provisions of the federal
securities laws. They also agreed to pay more than $68,000 combined in civil
penalties, disgorgement and interest.