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CFTC Charges Denver Resident With Running Fraudulent Crypto Scheme

cryptofraud sep14 17feb20 lt

The U.S. Commodity Futures Trading Commission (CFTC) has charged Denver resident Breonna Clark and Colorado-based Venture Capital Investments Ltd. with running a fraudulent scheme.

The regulator has filed a civil enforcement action in the U.S. District Court for the District of Colorado against Clark and Venture Capital, charging them of soliciting U.S. residents to trade foreign currency contracts as well as Bitcoin and other digital assets through a commodity pool operated by the defendants.

The two defendants are also charged for fraudulently soliciting prospective pool participants by misleading customers about their experience, expertise, and investment track record, the complaint alleges. They promised future profitability trading forex and digital assets.

They are alleged to have collected $534,829 from about seventy-two individuals. Out of this, at least $418,000 is believed to have been used for personal expenses, including buying a BMW vehicle and to make Ponzi-type payments to other pool participants.

Further, the complaint alleges that the defendants sent pool participants false account statements, which purported to show trading gains, to conceal their misappropriation. They also failed to appropriately register with the Commission pursuant to the Commodity Exchange Act and regulations.

The CFTC seeks "restitution to defrauded customers, disgorgement of ill-gotten gains, civil monetary penalties, permanent registration and trading bans, and a permanent injunction against future violations of the Commodity Exchange Act."

The agency was assisted in its investigations by the Financial Supervision Commission of Bulgaria, Financial Markets Authority of New Zealand, Seychelles Financial Services Authority, St. Vincent and the Grenadines Financial Services Authority, and the United Kingdom Financial Conduct Authority.

The CFTC strongly urges the public to verify a company's registration with the Commission before committing funds.

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