The promotional materials used by HyperFund allegedly contained false claims, misleading investors into believing that they would receive daily passive rewards ranging from 0.5% to 1% upon purchasing HyperFund "memberships.
In a major development, the Justice Department has taken action against two individuals and secured the guilty plea of another person involved in a massive cryptocurrency fraud scheme worth a staggering $1.89 billion.
One of the accused, Sam Lee, a 35-year-old Australian citizen currently residing in Dubai, United Arab Emirates, has been charged for his alleged role in co-founding various entities such as HyperFund, HyperTech, HyperCapital, HyperVerse, and HyperNation. These organizations are believed to be part of the fraudulent scheme.
Additionally, Rodney Burton, a 54-year-old from Miami, and Brenda Chunga, a 43-year-old from Severna Park, Maryland, have been identified as promoters of HyperFund. Their involvement in promoting this fraudulent enterprise has also come to light.
“The defendants are charged with defrauding investors to the tune of $1.89 billion. As alleged in court documents, the defendants falsely represented that investors would receive substantial returns paid from cryptocurrency mining operations, which did not in fact exist,” said Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division. “With our partners in Homeland Security Investigations and IRS Criminal Investigation, we are committed to uncovering sophisticated frauds involving cryptocurrency and digital assets and bringing those who perpetrate them to justice.”
“The level of alleged fraud here is staggering,” said U.S. Attorney Erek L. Barron for the District of Maryland. “Whether it’s cryptocurrency fraud, or any other financial frauds, 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.”
Lee and his accomplices are accused of engaging in fraudulent activities by offering and selling investment contracts through HyperFund's online platform. According to court documents, this scheme took place between June 2020 and November 2022.
The promotional materials used by HyperFund allegedly contained false claims, misleading investors into believing that they would receive daily passive rewards ranging from 0.5% to 1% upon purchasing HyperFund "memberships." These rewards were promised to continue until the investor's initial investment doubled or tripled.
To further deceive investors, HyperFund claimed that these payments would be funded by their revenues from large-scale crypto mining operations. However, it was later revealed that HyperFund did not actually possess such operations. As the scheme progressed, HyperFund allegedly started blocking investor withdrawals, adding to the suspicions surrounding their activities.
“Today’s charges are a testament to the incredible work of HSI New York’s El Dorado Task Force,” said Acting Special Agent in Charge Erin Keegan of Homeland Security Investigations (HSI) New York. “I commend our law enforcement partners, including those at HSI Baltimore, for their outstanding collaboration. HSI will continue to protect American investors from financial predators.”
“The illegal activity alleged in this case is precisely the type of conduct IRS Criminal Investigation and our law enforcement partners are committed to deterring,” said Acting Special Agent in Charge David Meisenheimer of the IRS Criminal Investigation (IRS:CI) Washington, D.C. Field Office. “These charges send a clear message that we have the tools and internal fortitude to protect our financial systems by diligently investigating, prosecuting, and holding accountable those who seek to defraud the American public.”
Lee has been accused of conspiring to commit securities fraud and wire fraud. If found guilty, he could be sentenced to a maximum of five years in prison. On the other hand, Burton has been charged with operating an unlicensed money transmitting business, both through conspiracy and actual operation.
He too could face a maximum penalty of five years in prison for each count. Chunga, however, has already pleaded guilty to conspiring to commit securities fraud and wire fraud. Her sentencing is scheduled for May 1, and she too could be sentenced to a maximum of five years in prison.
Ultimately, the decision on their sentences will be made by a federal district court judge, who will take into account the U.S. Sentencing Guidelines and other relevant factors.
The case is currently under investigation by the El Dorado Task Force of HSI New York and IRS:CI. The prosecution of this case is being handled by Trial Attorney Tian Huang from the Criminal Division’s Fraud Section, along with Assistant U.S. Attorneys Aaron S.J. Zelinsky and Spencer Todd for the District of Maryland.
This announcement by the Justice Department highlights the seriousness of the charges and the commitment to bring those responsible for such fraudulent activities to justice.
If you believe that you have been a victim in this case, we urge you to reach out to the Fraud Section’s Victim Witness Unit. You can contact them toll-free at (888) 549-3945 or by sending an email to victimassistance.fraud@usdoj.gov. For more information about victims’ rights, please visit www.justice.gov/criminal/criminal-vns/victim-rights-derechos-de-las-v-ctimas.
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