Posts Tagged: fraud

Mining Capital Coin CEO indicted in $62 million crypto fraud scheme

Mining Capital Coin CEO and founder Luiz Capuci Jr. was — in an indictment unsealed yesterday — accused by the DOJ of allegedly running a $ 62 million global investment fraud scheme. He's the latest of severalcrypto company heads who have recently been similarly charged.

Through his company, Capuci convinced investors to purchase “Mining Packages," a global network of cryptocurrency mines that promised a certain return on investment every week. But instead of using investors’ funds to mine cryptocurrency as he promised, the DOJ alleges that Capuci diverted the funds to his own cryptocurrency wallets. Another MCC product known as “Trading Bots” operated under the same false pretenses. Capuci claimed that the bots operated in “very high frequency, being able to do thousands of trades per second” and promised investors daily returns.

“As he did with the Mining Packages, however, Capuci allegedly operated an investment fraud scheme with the Trading Bots and was not, as he promised, using MCC Trading Bots to generate income for investors, but instead was diverting the funds to himself and co-conspirators,” wrote the DOJ in its indictment.

MCC seemed to have all the workings of a pyramid scheme. Capuci recruited affiliates and promoters to lure investors. In return, he promised the promoters a number of lavish gifts, including Apple watches, iPads and luxury vehicles.

Currently the FBI’s Miami Field Office is investigating the case. The DOJ has charged Capuci, who is from Port St. Lucie, Florida, with conspiracy to commit wire fraud, conspiracy to commit securities fraud and conspiracy to commit international money laundering. If found guilty, he faces a maximum sentence of 45 years.

In a review of the cryptocurrency mining platform, crypto blogger Peter Obi noted that the combination of MCC’s $ 50 monthly fee for membership and its steep 3% withdrawal fee meant that investors were unlikely to make a profit unless they referred other investors. He pointed out that such a referral process was “particularly worrying” because it was consistent with other past crypto scams.

Indeed, a number of crypto leaders have been accused by authorities of running Ponzi schemes in recent years. Earlier this year the DOJ indicted Bitconnect founder Satishkumar Kurjibhai Kumbhani for allegedly running a $ 2 billion Ponzi scheme — believed to be the largest virtual currency pyramid scheme in history.

Capuci never registered his company with the SEC. The agency today issued a fraud alert for the company. According to the SEC press release, Capuci and his associates successfully convinced 65,535 investors to purchase mining packages worldwide and promised daily returns of one percent, paid weekly for over a year. In total, the group netted $ 8.1 million from the sale of the mining packages and $ 3.2 million from initiation fees.

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Russia busts card fraud ring that included an infamous hacker

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AT&T will automatically block fraud calls for new customers

AT&T is making quick use of FCC rules explicitly allowing carriers to block robocalls by default. The network will start automatically blocking fraud calls (and issuing suspected spam call alerts) for new phone customers as a matter course, at n…
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Android ad fraud scheme drained users’ batteries and data

BuzzFeed News has confirmed a massive ad fraud scheme, which was originally uncovered by at least two fraud detection firms, that drained users' batteries and data. The scheme begins by hijacking the in-app advertisements of developers using Twitter'…
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US Secret Service is probing how crooks use smart credit cards for fraud

Credit card thieves have been taking advantage of smart card technologies to avoid getting caught, according to Krebs on Security. The US Secret Service offices in New York and St. Louis have apparently been working on a criminal investigation involv…
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Ticketmaster buys a blockchain company to guard against ticket fraud

Ticketmaster will soon have another way to fight bogus ticket sales: by hopping on one of the biggest tech bandwagons of 2018. It's acquiring Upgraded, a company that melds blockchain's distributed trust with encrypted barcodes to minimize the fraud…
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US regulators charge three bitcoin operators with fraud

Today the US Commodity Futures Trading Commission announced that it has filed a federal civil enforcement action against three virtual currency operators. The details of one case remain sealed, but the other two companies facing charges are CabbageTe…
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Fyre Festival founder arrested, charged with wire fraud

There has been one arrest following April's disastrous Fyre Festival event, as the Southern District of New York US Attorney's office announced the arrest of Fyre Media founder William McFarland. He's charged with wire fraud over allegedly lying to i…
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Former Epix exec pleads guilty over $7 million fraud

In 2009, Viacom, Lionsgate and MGM joined forces to launch a premium movie channel called Epix, with Emil Rensing as its Chief Digital Officer. Turns out hiring Rensing was a bad move: according to the Justice Department, he has just pleaded guilty t…
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French authorities raid Google’s Paris HQ over ongoing tax fraud case

French authorities this morning raided Google’s Paris HQ, seeking more information for an ongoing tax fraud case. Investigators have been at Google’s offices since 0500 am (0300 GMT), a source told Reuters. “A raid is underway at Google’s,” the source said. There are supposedly 100 investigators at the scene, all searching for more information regarding tax fraud. France is […]

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