- The U.S. DOJ has announced charges in a billion-dollar crypto fraud scheme.
- Three individuals have been charged in the case.
- They include an Australian entrepreneur and two U.S. nationals.
The U.S. Department of Justice (DOJ) has charged three individuals, including Australian crypto entrepreneur Sam Lee, for their alleged role in a billion-dollar crypto fraud scheme.
On January 29, the DOJ announced multiple charges against Lee alongside U.S nationals Rodney Burton and Brenda Chunga for allegedly “orchestrating a $1.89 billion cryptocurrency fraud scheme” through HyperFund, also known as HyperTech or HyperCapital.
Fraud Scheme Built on HyperFund’s Online Investment Platform
According to the DOJ’s statement, Lee allegedly co-founded HyperFund, and his co-conspirators participated in its promotion.
The DOJ accused the trio of duping investors into purchasing HyperFund “memberships,” promising them daily passive rewards of between 0.5% and 1% “until the company either doubled or tripled the investor’s initial investment.”
“HyperFund allegedly claimed that its payments would be disbursed in part from its revenues from large-scale crypto mining operations, when in truth, HyperFund did not have such operations. Beginning in at least July 2021, HyperFund allegedly began to block investor withdrawals,” the DOJ wrote.
Based on the allegations, the DOJ charged Lee with one count of conspiracy to commit securities fraud and wire fraud and Burton with one count of conspiracy to operate an unlicensed money-transmitting business and one count of operating an unlicensed money-transmitting business.
Both Lee and Burton face a maximum penalty of five years imprisonment if convicted.
In the meantime, Chunga pleaded guilty to one count of conspiracy to commit securities fraud and wire fraud and could face up to three years in prison. The trio will be arraigned before a federal district judge later.
Read why the DOJ believes CZ is a flight risk while awaiting trial in the U.S.:
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