The US Securities Exchange Commission announced that it obtained an asset freeze and other emergency relief against Daniel F. Putnam, Jean-Paul Ramirez Rico, and Angel A. Rodriguez, who allegedly defrauded investors of over $12 million in two cryptocurrency-related schemes. According to the SEC's complaint, Putnam operated a multilevel marketing business known as the "Modern Money Team" and sold interests in a purported crypto mining operation to nearly two hundred investors. The complaint further alleges that Putnam misappropriated users' funds and spent on his personal expenses.
MLM operators offered high returns to victims.
The US Securities Exchange Commission alleged that the MLM operators Putnam, Ramirez, and Rodriguez, raised additional funds by offering so-called "cryptocurrency trading packages" to investors with the potential for high returns. It is also alleged that the defendants misappropriated investor funds for personal use and to make Ponzi-like distributions to earlier investors. According to the SEC's complaint, the defendants, in this case, conducted these fraudulent schemes through two Utah companies controlled by Putnam, MMT Distributions, LLC, and R & D Global, LLC. The US SEC is seeking permanent injunctions, disgorgement of ill-gotten gains with prejudgment interest, and civil penalties.
Crypto scams surge amid the pandemic.
Earlier, the Federal Bureau of Investigation had issued a warning about the potential surge in crypto scams amid the pandemic. The FBI had warned that scammers would tailor their pitch to appeal to people's fear amid the global pandemic. It also said that fraudsters are leveraging increased fear and uncertainty during the ongoing global pandemic to steal people's money and launder it through the complex cryptocurrency ecosystem. Scammers might pose as newly-remote workers collecting "donations" via email, or some might impersonate charities that accept cryptocurrency, which is a major red flag, according to the FBI. Crypto scammers lure in people into investing in fake cryptocurrency projects to "save" victims from the inevitable economic crash.
