- The SEC has initiated legal action against 17 individuals linked to CryptoFX LLC for running a Ponzi scheme that defrauded over 40,000 investors of $300 million.
- Defendants promised unrealistic returns through crypto and forex trading, using new investments to pay earlier investors and for personal enrichment.
- Two defendants settled with the SEC, agreeing to judgments preventing future securities law violations and paying over $68,000 in fines and restitution.
CryptoFX LLC, a Texas-based company, is at the center of legal action initiated by the U.S. Securities and Exchange Commission (SEC). Per the suit, 17 individuals are implicated in orchestrating a Ponzi scheme, allegedly defrauding over 40,000 investors, primarily within the Latino community, and amassing $300 million. The legal proceeding follows an emergency intervention in September 2022, which sought to halt the fraudulent operations led by Mauricio Chavez and Giorgio Benvenuto, identified as the principal figures behind the scheme.
The fraudulent scheme, which operated between May 2020 and October 2022, saw defendants from states including Texas, California, Louisiana, Illinois, and Florida. These individuals reportedly promised investors unrealistic returns ranging from 15 to 100 percent through cryptocurrency and foreign exchange trading. The SEC’s complaint reveals that a significant portion of the invested capital was not directed toward trading activities but was rather used to pay earlier investors and for personal gains under the guise of commissions and bonuses.
Gabriel and Dulce Ochoa, among the defendants, are accused of persistently soliciting investments even after the court issued orders to cease such activities. Allegedly, Gabriel Ochoa advised investors to withdraw their complaints to the SEC, suggesting this would aid in the recovery of their investments. Another defendant, Maria Saravia, is accused of deceiving investors by dismissing the SEC’s lawsuit as fictitious.
The SEC has charged the involved parties with multiple violations, including those related to antifraud, securities registration, and broker registration requirements under federal securities laws. Gabriel Ochoa faces additional charges for breaching whistleblower protection provisions. The regulator aims to secure permanent injunctions, demand the return of funds with interest before judgment, and impose civil penalties on the accused.
Luis Serrano and Julio Taffinder, two of the charged individuals, have reached a settlement with the SEC, resulting in final judgments that do not require them to admit or deny the allegations made against them. This agreement includes measures to prevent any future breaches of securities laws and mandates the payment of over $68,000 in combined penalties, disgorgement, and interest. As of now, the SEC’s Fort Worth Regional Office will continue to lead the ongoing investigation, which includes conducting litigation to seek justice for the victims.
In the broader context of crypto-related crimes, the increasing prevalence of crypto scams represents a significant risk, highlighted by a recent report from ScamSniffer. The report detailed phishing scams in January 2024, which led to considerable financial losses of up to $55 million.
