The Justice Division indicted Mining Capital Coin CEO Luiz Capuci Jr. for “allegedly orchestrating a $62 million world funding fraud scheme,” the company mentioned Friday.
Mining Capital Coin, or MCC, is a cryptocurrency mining and funding platform. Capuci, who’s from Port St. Lucie, Florida, allegedly misled traders by promoting “Mining Packages,” promising substantial returns from mining new cryptocurrencies in what MCC described as their worldwide community of crypto mining machines, in line with the DOJ press launch.
Based on a US Securities and Alternate Fee grievance filed final month, Capuci offered mining packages to greater than 65,000 traders since no less than January 2018. The group promised day by day returns of 1% for as much as a 12 months, the SEC press launch says.
However as an alternative, the DOJ alleges, Capuci diverted the funds to his personal cryptocurrency wallets. MCC netted no less than $8.1 million from the sale of the mining packages and $3.2 million in initiation charges, which funded a lavish life-style, together with Lamborghinis, a yacht and actual property, in line with the SEC grievance.
“Cryptocurrency-based fraud undermines monetary markets worldwide as unhealthy actors defraud traders and limits the flexibility of reputable entrepreneurs to innovate inside this rising area,” mentioned Assistant Lawyer Normal Kenneth A. Well mannered, Jr. of the Justice Division’s Legal Division.
CNN Enterprise has reached out to Capuci for remark.
Capuci additionally marketed MCC’s personal cryptocurrency, “Capital Coin,” in line with the DOJ press launch. The discharge alleges one other fraudulent MCC funding avenue, “Buying and selling Bots,” which Capuci claimed operated at “very excessive frequency, with the ability to do hundreds of trades per second.” Capuci claimed the Buying and selling Bots would supply day by day returns, in line with the DOJ launch.
Capuci additionally allegedly ran a pyramid scheme, in line with the DOJ, recruiting promoters to promote the mining packages and promising them presents starting from Apple watches to Capuci’s private Ferrari, the press launch says.
The DOJ charged Capuci with conspiracy to commit wire fraud, conspiracy to commit securities fraud, and conspiracy to commit worldwide cash laundering. He may resist 45 years in jail if convicted of all counts. The FBI Miami subject workplace and the Homeland Safety Investigations are investigating the case.
The Justice Division has charged others this 12 months for working fraudulent cryptocurrency schemes. In February, a federal grand jury in San Diego indicted the founding father of BitConnect for allegedly orchestrating a $2.4 billion world Ponzi scheme.