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The Securities and Exchange Commission (SEC) has charged 17 people for their roles in a $300 million Ponzi scheme out of Houston that primarily targeted Latino investors.
In the heart of the allegations, the SEC’s complaint details how CryptoFX, the company at the center of the scheme, was stopped in its tracks by the SEC’s emergency action in September 2022. This action was part of a broader investigation that began in 2022, aimed at uncovering the extent of the fraudulent activities led by Mauricio Chavez and Giorgio Benvenuto. According to the SEC, “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.”
The defendants, identified as leaders within the CryptoFX network, are accused of misleading investors with promises of returns ranging from 15 to 100 percent. However, instead of employing the collected funds for legitimate trading purposes, the SEC alleges that these individuals primarily used the money to sustain the scheme by paying earlier investors, awarding themselves hefty commissions and bonuses, and financing their personal lifestyles. Even after legal actions were initiated to shut down the operations, efforts to solicit new investments continued.
SEC Press release: The Securities and Exchange Commission filed an emergency action to stop an on-going fraudulent and unregistered crypto asset offering targeting Latino investors, run by defendants Mauricio Chavez and Giorgio Benvenuto through a company Chavez founded and controlled, CryptoFX, LLC. . . . The SEC alleges that Chavez was actually running a Ponzi scheme; rather than use investor funds for crypto trading, Chavez used more than 90% of investor funds to pay fake returns to investors, support his lifestyle, and purchase and develop real estate that he and Benvenuto controlled. For his part, Benvenuto allegedly solicited a large investor into the scheme and diverted investor funds to himself and a company that he and Chavez owned, CBT Group, LLC. In total, the SEC alleges that Chavez and Benvenuto made approximately $2.7 million in Ponzi payments while diverting almost $8 million for their own use, including nearly $1.5 million that Chavez spent on cars, credit card payments, jewelry, adult entertainment, and a house in his wife’s name.
