The Securities and Exchange Commission (SEC) has taken legal action against 17 individuals for their purported involvement in a $300 million Ponzi scheme that primarily targeted over 40,000 Latino investors. The complaint was filed in federal court in Houston, Texas, on Thursday, marking a significant development in the ongoing investigation.
This latest legal action by the SEC comes on the heels of an emergency measure taken in September 2022, wherein the regulatory body halted the operations of CryptoFX, the company allegedly responsible for orchestrating the Ponzi scheme. At that time, the SEC also brought charges against Mauricio Chavez and Giorgio Benvenuto, identified as the two key figures involved in the fraudulent scheme.
Since 2022, the Securities and Exchange Commission (SEC) has been diligently pursuing its investigation to uncover additional individuals involved in the alleged $300 million Ponzi scheme orchestrated by CryptoFX. This ongoing effort has led to the identification of 17 defendants believed to have played leadership roles within the CryptoFX network, as outlined in a complaint filed in the Southern District of Texas.
Gurbir Grewal, director of the SEC’s division of enforcement, emphasized the gravity of the situation, stating, “We allege that CryptoFX was a $300 million Ponzi scheme that targeted Latino investors with promises of financial freedom and life-altering wealth from ‘risk-free’ and ‘guaranteed’ crypto and foreign exchange investments.” He further emphasized, “In the end, the only thing that CryptoFX guaranteed was a trail of thousands upon thousands of victims stretching across 10 states and two foreign countries.”
According to the SEC’s complaint, the defendants lured predominantly Latino investors with promises of lucrative returns ranging from 15 to 100 percent on their investments. However, the funds raised were allegedly not utilized for trading purposes as promised. Instead, they were purportedly misappropriated to pay fictitious returns to earlier investors, fund personal commissions and bonuses for the defendants, and support their own lavish lifestyles.
Despite court orders to halt the fraudulent scheme, Gabriel and Dulce Ochoa are accused of persisting in soliciting investments. Additionally, Gabriel Ochoa allegedly instructed two investors to retract their complaints to the SEC in an attempt to recover their investments.
The SEC has levied charges against Gabriel and Dulce Ochoa, Maria Saravia, Gloria Castaneda, Ismael Zarco Sanchez, and Roberto Zavala for violating anti-fraud, securities-registration, and broker-registration provisions of federal securities laws. Gabriel Ochoa faces additional charges for violating whistleblower protection provisions.
Moreover, Gabriel Arguelles, Hector Aquino, Orlin Wilifredo Turcios Castro, Carmen De La Cruz, Elizabeth Escoto, Reyna Guiffaro, Marco Antonio Lemus, Juan Puac, Luis Serrano, Julio Taffinder, and Claudia Velazquez have been charged with violating securities-registration and broker-registration provisions.
The SEC is seeking permanent injunctions, disgorgement with prejudgment interest, and civil penalties against each defendant. Two defendants, Serrano and Taffinder, have already agreed to final judgments, pending court approval, without admitting or denying the allegations, and have agreed to pay a total of over $68,000.