US SEC Files Charges Against 11 People Involved in Crypto Scam

  • The SEC has been actively pursuing crypto regulation over the last few months.
  • Crypto scams and hacks have been on the increase since late 2021.

The Securities and Exchange Commission has announced that it has filed charges against 11 individuals for their roles in the development and promotion of a fraudulent crypto-pyramid and Ponzi scheme that garnered more than $300 million from retail investors across the globe, including in the US.

The four Forsage scheme founders were among those charged by the regulatory body. The SEC said in a statement that the wanted founders were last said to be living in Russia, Indonesia, and the Republic of Georgia.

Crypto-related scams have been on the rise since the tail of 2021, and the SEC has made it its priority to regulate the industry and bring bad actors to face the law. The website for the alleged scam reportedly went live in January 2020 and enabled millions of individual investors to transact using smart contracts. The names of the four founders, according to the SEC, are Vladimir Okhotnikov, Jane Doe a/k/a Lola Ferrari, Mikhail Sergeev, and Sergey Maslakov.

According to the SEC, the platform allegedly ran as a pyramid scheme for more than two years, during which time investors made money by enlisting new participants. The SEC’s charge further claimed that Forsage used resources from new investors to pay off prior investors in a conventional Ponzi scheme.

The four founders were reportedly warned by various regulatory bodies but instead, continued to promote their Ponzi scheme while disputing the allegations in a number of YouTube videos. Reacting to the story, Carolyn Welshhans, Acting Chief of the SEC’s Crypto Assets and Cyber Unit, said that the alleged fraudsters will not be able to use blockchain to cover their tracks. Carolyn remarked,

As the complaint alleges, Forsage is a fraudulent pyramid scheme launched on a massive scale and aggressively marketed to investors. Fraudsters cannot circumvent the federal securities laws by focusing their schemes on smart contracts and blockchains.

The complaint, which was submitted to the United States District Court for the Northern District of Illinois, also charged Cheri Beth Bowen of Pelahatchie, Miss., Ronald R. Deering of Coeur d’Alene, Idaho, Samuel D. Ellis of Louisville, Mark F. Hamlin of Henrico, Carlos L. Martinez of Chicago, Alisha R. Shepperd of Dunedin, and Sarah L. Theissen. These names were all accused of breaking anti-fraud provisions of the federal securities laws. The SEC, in its charges, demanded injunctive remedies, disgorgement, and civil penalties.

Two of the defendants, Ellis and Theissen, consented to settle the accusations and be permanently restrained from violating the charged provisions and engaging in certain unlawful behavior. They, however, did not admit or dispute the charges. Theissen will be obligated to pay disgorgement and civil penalties as defined by the court, and Ellis agreed to pay disgorgement and civil penalties as well. 

Lawrence Woriji Verified

Lawrence has covered some exciting stories in his career as a journalist, he finds blockchain-related stories very intriguing. He believes Web3 will change the world and wants everyone to be a part of it.

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