The U.S. Commodity Futures Trading Commission (CFTC) has filed a federal civil enforcement action this week against four men for allegedly conducting a $44 million bitcoin Ponzi scheme.
According to a CFTC news release, Dwayne Golden of Florida, Jatin Patel of India, Marquis Egerton of North Carolina and Gregory Aggesen of New York are charged with fraud for carrying out a Ponzi scheme involving bitcoin, fraudulently soliciting more than $44 million from investors and misappropriation of millions of dollars.
The commission says it is seeking restitution, disgorgement, civil monetary penalties, permanent trading and registration bans, and a permanent injunction against further violations of the Commodity Exchange Act (CEA) and CFTC regulations.
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“This case illustrates how fraudsters never tire of devising schemes to separate people from their hard-earned money, and digital asset frauds are no exception,” said Acting Director of Enforcement Vincent McGonagle.
According to the complaint, Golden, Patel, and Egerton allegedly operated the websites Empowercoin and Ecoinplus, which they used to fraudulently solicit individuals of more than $23 million of bitcoin. Meanwhile, Golden, Patel, Aggesen and an accomplice, operated the website JetCoin, which took in more than $21 million of bitcoin.
The CFTC alleges the websites promised customers their bitcoin would be traded by professionals, with guaranteed daily profits. In reality, that bit coin was either misappropriated by the defendants or used to pay other investors, the CTFC says.
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The complaint says Golden, Patel and Egerton allegedly misappropriated approximately $9.8 million worth of bitcoin through Empowercoin and Ecoinplus, while Golden, Patel, Aggesen and their accomplice misappropriated approximately $7.8 million in bitcoin through JetCoin.
The commission says Golden, Egerton, and Aggesen have also been indicted in a parallel federal criminal case for wire fraud, money laundering, and a separate individual was charged with obstruction of justice.
