Law enforcement agencies in the United States are continuously busting fraudulent cryptocurrency schemes. On Wednesday, the Securities and Exchange Commission (SEC ) brought charges against four promoters of the Forcount Trader Systems, a fraudulent crypto pyramid scheme, for violating the anti-fraud and registration provisions.
The Department of Justice brought separate criminal charges against three individuals of Forcount and the founders and promoters of another fraudulent crypto scheme, IcomTech.
Criminal Charges Against Forecount and IcomTech
IcomTech and Forcount promoted themselves as cryptocurrency mining and trading companies, promising high returns to their investors. Forcount targeted hundreds of retail investors, primarily from Spanish-speaking communities in the US and abroad, raising more than $8.4 million.
The DoJ has charged the six individuals related to IcomTech with conspiracy to commit wire fraud. Three individuals of Forcount are facing charges of wire fraud and conspiracy to commit wire fraud, while two have been slapped with additional charges of conspiracy to commit money laundering and another one for making false statements.
“With these two indictments, this Office is sending a message to all cryptocurrency scammers: We are coming for you,” said US Attorney Damian Williams.
Forcount and IcomTech Ponzi Schemes
IcomTech operated from in or about mid-2018 until around the end of 2019, while Forcount was operational for a more extended period, from mid-2017 until the end of 2021. Both firms assured guaranteed daily returns to investors and even promised to double the investments in six months. In reality, none of the proceeds was invested; the operators paid off old investors with proceeds from new investors, making them a classic Ponzi scheme.
The promoters even siphoned proceeds for using them in scheme promotions. They targeted small communities and hosted lavish expos. They flaunted their luxurious lifestyles to lure victims to investments. They even sold native platform tokens to investors.
In addition, many investors faced issues with withdrawals, received excuses and even paid hidden fees when they complained. The scheme blew up when they stopped making payments, and the promoters stopped responding to victims.
“The excitement around cryptocurrency and the potential to make huge profits attracted would-be investors to the alleged schemes run by the individuals indicted today. With high-end clothes and cars, these individuals are alleged to have presented a life of luxury to potential investors, but instead of a lucrative investment opportunity, the victims were fleeced of their savings and left with nothing to show for it,” said Ivan Arvelo, the Special Agent in Charge at the Department of Homeland Security.
