A newly filed SEC complaint shows that at one point, the supposed ‘Ponzi’ scheme engaged an actor living in Thailand to act as the chief executive officer when it was unveiled in 2021.
A lawsuit from the Securities and Exchange Commission (SEC) shows that at least two individuals were responsible for a supposed $1.7B currency ‘fraud’ scheme. This scheme once assured investors concerning plans to list on the Hong Kong stock exchange. Additionally, it recruited an actor to act as the company’s chief executive officer (CEO).
SEC Charges HyperFund Fraud Orchestrators
The recently filed charge by the SEC charged Brenda ‘Bitcoin Beautee’ Chunga’ and Xue Lee (also known as Sam Lee) for their role in the scheme that ran under various names. Examples include HyperVerse, HyperFund, and HyperTech.
It is alleged that the two marketed different ‘membership’ packages to investors with the untrue promise of assured, significant returns from crypto mining activities. Besides, it purportedly utilized the ‘illegally acquired proceeds’ to purchase condos, buy luxury vehicles, and finance crypto wallets.
The Securities and Exchange Commission noted that Brenda has accepted to pay the charges and settle civil penalties. The court will determine the amount to be paid at a later date.
However, she and Lee are also facing charges from the United States Attorney’s Office for the District of Maryland for plotting to carry out securities and wire fraud. Besides, Brenda has pleaded guilty to the charges. The prosecutors have also charged Rodney Burton, a promoter.
HyperFund Actors Promised Listing on Hong Kong Exchange
The Securities and Exchange Commission claims that Lee once revealed to recruiters that HyperTech intended to list on the Hong Kong Stock Exchange by 2022.
According to the regulator, Brenda and Lee also shared fake screenshots of various media appearances from a news channel and ‘Next: Blockchain,’ an Amazon Prime documentary, to enhance the company’s status.
The company’s marketing strategies involved engaging a Thailand actor to promote HyperVerse’s unveiling. The fraud actor acted as the company’s chief executive officer. The SEC noted that the individual presented as Steve Reece Lewis was an actor playing a fictitious character’s role. He was not HyperVerse’s chief executive officer.
HyperFund Operations Matched Pyramid Scheme
The Securities and Exchange Commission says that Lee enticed more recruits by running a pyramid scheme-appearing referral system to award current members for enlisting more investors. Additionally, he made untrue promises that incoming recruits could participate in initial coin offerings at a market value of 20 to 30%.
Brenda is accused of taking $3.7M that was used on a house in Maryland worth $1.2M, a Dubai condo worth $1.1M, and designer clothing. On the other hand, Lee took cryptocurrencies worth an estimated $140000 and moved them into a wallet under his management.
A January 29 statement by Gurbir Grewal, Director of the SEC’s Division of Enforcement, shows that this business, which ran between June 2020 and May 2022, demonstrates how fraud and nonadherence to United States securities regulations in the cryptocurrency sector are still prevalent.
Grewal said that, as claimed in their complaint, Brenda and Lee lured investors with the promise of profits from mining crypto assets. However, HyperFund only mined the investors’ pockets.
The Securities and Exchange Commission seeks lasting injunctive relief, conduct-founded injunctions barring the accused persons from participating in cryptocurrency offerings or multilevel marketing, prejudgment interest, disgorgement of illegally acquired proceeds, and civil penalties.
Brenda is Maryland-based, while Lee is an Australian citizen who the regulator believes is presently residing in the United Arab Emirates (UAE). Further, Lee is allegedly being investigated by the Australian securities regulator following the fall of Blockchain Global, his other crypto business. A January 23 report shows that the firm fell in 2021, with $58M owed to creditors.
The Australian Securities Investment Commission might initiate charges against Lee, Ryan Xu, and Allan Guo. The charges are linked to possible violations of the Corporation Act.
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