DOJ CHARGES TRIO IN $1.89 BILLION CRYPTOCURRENCY FRAUD CASE 

The US Department of Justice (DOJ) has filed charges against three individuals for defrauding investors of nearly $2 billion through a fraudulent cryptocurrency investment program. The scheme, known as HyperFund, promised investors high returns and claimed to run a large crypto mining business that did not exist.

The DOJ identified the individuals involved as Sam Lee, an Australian residing in the United Arab Emirates (UAE) and co-founder of HyperFund, along with American citizens Rodney Burton and Brenda Chunga, who acted as promoters for the project. HyperFund also operated under various names such as HyperCapital, HyperNation, HyperVerse, and HyperTech.

The fraud took place between June 2020 and November 2022, during which Lee and his promoters made false claims to investors. They promised daily passive rewards of 0.5% to 1% for those who purchased HyperFund membership packages and pledged to double or triple their initial investments.

Additionally, the trio asserted that a portion of the returns would come from the profits generated by HyperFund’s supposed “large-scale crypto mining operations.” However, the DOJ revealed that such operations were fictitious.

In July 2021, the company allegedly began blocking investors from making withdrawals, indicating a failure to fulfill its promises.

United States Attorney Erek L. Barron for the District of Maryland commented on the case, stating, “The level of alleged fraud here is staggering. Whether it’s cryptocurrency fraud or any other financial fraud, if it sounds too good to be true, it probably is.”

Chunga has pleaded guilty to her charges, while Lee and Chunga face charges of conspiracy to commit securities fraud wire fraud and operating an unlicensed money-transmitting business, respectively. Each could face a maximum prison sentence of five years if convicted.

The United States Securities and Exchange Commission (SEC) has also filed charges against Lee and Chunga for unregistered offers and sales of securities and fraud. The SEC seeks the disgorgement of ill-gotten funds, prejudgment interest, and civil monetary penalties. Chunga has agreed to settle the charges, pay disgorgement and fines as determined by the court, and will be subject to certain prohibitions.

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