$200 Million Brazilian Crypto Fraud Scam: The US Seizes $24 Million Worth of Digital Currencies
Meanwhile, according to the DOJ statement, “the U.S. seizures were tied to Brazilian Marcos Antonio Fagundes’ alleged role in the scheme.” Fagundes and several unnamed accomplices have been “charged with several criminal violations of Brazilian law, including, among other offences, the operation of a financial institution without legal authorization.”
During August 2017 to May 2019, Fagundes and other defendants solicited funds from prospective investors over the internet, sometimes in combination with telephone and other means, and held the funds received in a manner that subjected it to regulation as a financial institution under Brazilian law, with which Fagundes and the other defendants failed to comply.
In a statement, the DOJ says the U.S. acceded to Brazil’s request in line with the cooperation treaty signed between the two countries with respect to “Mutual Legal Assistance in Criminal Matters.”
The statement concludes that “the cryptocurrency firm holding the accounts cooperated with law enforcement authorities in executing this seizure.” Still, the statement does not give the name of the cooperating crypto firm.
Meanwhile, the DOJ says U.S. authorities are now working in close cooperation with the Brazilian authorities and others to “restrain the virtual currency and preserve it for forfeiture proceedings pending in Brazil to compensate the investors victimized in this fraudulent investment scheme.”
The DOJ statement provides a short summary of a Brazilian court’s findings against Fagundes and his accomplices. The statement says:
The statement adds that the accused also faces charges of “fraudulent management of a financial institution, misappropriation, and money laundering, as well as securities law violations.”
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However, as the Brazilian court found, “only a very small amount of funds were invested in cryptocurrencies as promised, and very little was returned to the investors.”
The statement reveals that the “defendants solicited investors to give money to corporations they controlled, in the form of Brazilian currency or cryptocurrency, which the companies would then invest in a variety of virtual currency types.”
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