North Texas Man Pleads Guilty to His Involvement in Multi-Million Dollar International Fraud Scheme (DOJ Release)Individual Pleads Guilty in Brooklyn Federal Court to Extorting Cryptocurrency from Startup Company (DOJ Release)
From August 2017 through February 2019, Green operated a website called "Destination Bitcoin." Through the website and various referrals, Green received money from members of the public through cash, wire transfers into bank accounts controlled by Green, and online payment processors. Green then converted the funds to bitcoin and transferred the bitcoin to bitcoin wallet addresses provided by the customers. Green charged the customers a fee for this service.Federal law provides that any person who owns or controls a money transmitting business shall register the business (whether the business is licensed as a money transmitting business in any state) with the Secretary of the Treasury. Green admitted today that he knew he was required to register his business with the Secretary of the Treasury and that he failed to do so.
[M]oreira worked with co-conspirators to devise and execute an online fraud scheme, which involved, among other things, fabricating false identities and stories to entice victims and ultimately lure money from them. Moreira and his co-conspirators used the fraudulently obtained funds for personal purchases and converted portions of these funds for use in international shipping. According to the indictment, at least 80 victims sent money to Moreira and his co-conspirators, with at least 60 victims sending money directly to Moreira or accounts controlled by Moreira. These victims have lost a combined total of approximately $4 million. Moreira was indicted on Feb. 10, 2021 and charged with federal violations.
[T]he victim company ("Company") was a startup mobile-based business that issued cryptocurrency tokens such as Ether as loyalty rewards for generating user traffic to its clients' products. To raise capital, the Company planned to conduct an Initial Coin Offering ("ICO") in November 2017. In connection with the ICO, Hlady told the Company's executives that he had been a part of the Irish Republican Army, the National Security Agency, the Central Intelligence Agency and the Federal Bureau of Investigation; that he had been shot at and had killed people; and that he had "taken down" a head of state. In March 2018, Hlady and his co-conspirator Steven Nerayoff issued threats to Company executives that included destruction of the Company if it did not agree to demands for additional funds and Company tokens. On March 28, 2018, Hlady sent a text message to a Company executive stating, in part, "I promise I will destroy your community" if the Company did not comply with the demands. As a result of this threat, the Company transferred 10,000 ETH to Nerayoff.
operated the non-profit 501(c)(3) entity Asset Trader, located in Rolesville, NC, between 2012 to 2015. March represented that Asset Trader offered educational services to professionals and taxpayers in the area of exit planning. Asset Trader's stated educational mission allowed it to obtain classification as a 28 U.S.C. § 501(c)(3) tax-exempt non-profit organization. Asset Trader used its §501(c)(3) tax-exempt status to solicit tax-deductible donations in exchange for charitable gift annuities ("CGAs") and to recruit referral sources to obtain assets from potential donors. Through Asset Trader, March and his co-conspirators engaged in and executed what is commonly known as a "Ponzi" scheme to defraud investors by inducing them to invest with Asset Trader.During the course of the scheme, March solicited at least 22 victims to invest over $8,100,000 in charitable gift annuities and other products offered by Asset Trader. March and Asset Trader sold these securities to victims as retirement or exit planning vehicles classified as donations to March's § 501(c)(3) tax-exempt non-profit organization. March did not utilize any of the victim's money for charitable purposes; rather, he spent the money on "Ponzi" payments, his own lavish lifestyle, and expenses of the scheme.
[K]nauth falsely represented to a public company audit client that his firm was registered with the PCAOB. The Enforcement Division and OCA further allege that Knauth eventually filed an application to register his firm with the PCAOB, but the PCAOB repeatedly informed him over a nine-month period that the application was incomplete. Despite this, the Enforcement Division and OCA allege that Knauth performed the 2018 audit and three interim reviews for the public company. The Enforcement Division and OCA further allege that Knauth's actions resulted in violations by the public company of the reporting requirement that auditors of public companies be registered with the PCAOB. The Enforcement Division and OCA also allege that Knauth's audit and interim reviews failed to comply with multiple PCAOB Auditing Standards, including failing to properly plan the audit, failing to exercise due professional care and professional skepticism, and failing to obtain sufficient appropriate audit evidence.
During the period from at least July 2016 to April 2019, Respondent failed to establish and maintain a supervisory system, including written supervisory procedures, reasonably designed to monitor its employees' outside brokerage accounts. The firm's supervisory deficiencies led to its failure to timely monitor thousands of employee outside brokerage accounts for compliance with the firm's trading restrictions designed to identify self-dealing and other potentially deceptive trading practices. . . .
Velasco sought to transfer from his former firm to LPL four SEP IRA accounts holding variable annuities for four of his customers who all worked for the same business. As part of the transfer, the customers sought to surrender the variable annuities and would therefore incur a surrender fee unless one of several conditions applied, including that the customers had left their employment after five years from issuance of the annuity. To help the four customers avoid paying approximately $10,000 in surrender fees, in February 2017, Velasco drafted a termination letter for each customer that falsely stated the customers had left their employment. Velasco then submitted the termination letters to LPL to facilitate the transfer of the four accounts. Therefore, Respondent violated FINRA Rule 2010.. . .In December 2020, when questioned about the termination letters by FINRA staff during his on-the-record testimony, Velasco initially falsely testified that the customers had left their employment with the business when he drafted the four termination letters. At the conclusion of his on-the-record testimony that same day, however, Velasco corrected his prior testimony and admitted that he falsified the termination letters to help his customers avoid paying surrender fees. Therefore, Respondent violated FINRA Rules 8210 and 2010.
On or about October 1, 2020, Respondents filed a Motion for Sanctions in which they asserted, among other things, that Claimant failed to produce required discovery documents and abide by the Chairperson's Order dated September 11, 2020, requesting the production of such documents. Claimant filed a response on October 14, 2020, and Respondents filed a reply on October 19, 2020. On November 13, 2020, the Panel conducted a telephonic hearing so the parties could present oral argument on the Motion for Sanctions and, on November 16, 2020, issued an Order in which it ruled as follows:1. "Respondents' Motion for Sanctions is granted.2. Claimant will provide to Respondents the discovery or provide an objection or reason for each document not provided, on or before November 27, 2020. Claimant has an affirmative duty to communicate with Respondents regarding any discovery issues.3. Claimant is sanctioned the sum of Five Thousand ($5,000.00) dollars, to be paid directly to Respondents on or before November 27, 2020.4. Claimant will be sanctioned the additional sum of One Thousand ($1,000.00) Dollars if said discovery is not provided on November 27,2020, and for each additional week that the discovery is not provided to Respondents.5. The Panel will consider a Motion to Dismiss the Arbitration from Respondents if Claimant does not comply with the Panel's Orders."On or about January 11, 2021, Respondents filed an Expedited Motion for Additional Sanctions, to which Claimant responded on January 13, 2021, and Respondents replied on January 14, 2021. During the January 2021 evidentiary hearings, the Panel heard oral argument on the Motion for Additional Sanctions. Thereafter, the Panel denied Respondents' request for additional monetary damages and motion to compel, but ordered that adverse inferences be taken by the Panel for the series of text messages, email messages and phone conversations that Claimant failed to produce. Any other relief requests in the Motion for Additional Sanctions, including the request for dismissal of the claims against Claimant, were denied. The Panel also decided not to assess Claimant the $1,000.00 per week fee for failure to produce documents, and restated its prior Order that Claimant pay $5,000.00 to Respondents for her failure to produce the requested discovery documents.