CFTC: Court Orders Crypto Scam to Pay $900K + Restitution and Penalty

The Commodity Futures Trading Commission (CFTC) is reporting that the US District Court for the District of Colorado has entered a judgment against defendants Venture Capital Investments LLC (VCI) and its principal and manager Breonna Clark d/b/a Eliot Clark d/b/a Alexander Pak (Clark), of Denver, Colorado, for fraudulently soliciting and misappropriating funds from clients in a digital asset and forex Ponzi scheme.

According to the order, the defendants must pay $450,302 in restitution to defrauded clients plus a civil monetary penalty of $450,302. The CFTC’s costs must be covered as well.

The defendants are now permanently enjoined from engaging in conduct that violates the Commodity Exchange Act (CEA) and CFTC regulations, as well as banned from registering with the CFTC and trading in any CFTC-regulated markets.

A complaint pertaining to the case was filed on February 14, 2020. The court ruled that the defendants fraudulently solicited more than 72 clients to invest in commodity pools that purportedly trade in forex and digital assets, including Bitcoin, only to then misappropriate the money.

The court also found that the defendants lured their clients primarily by using social media, touting the ability of their purported “master team of traders” to provide consistent trading profits. The court found that the defendants misappropriated their clients’ money to acquire, among other things, a luxury automobile. The defendants also used their clients’ money to make Ponzi-type payments to others to maintain the scheme.

The CFTC thanks and acknowledges the assistance of the Financial Supervision Commission of Bulgaria, the St. Vincent and the Grenadines Financial Services Authority, the Financial Services Authority of Seychelles, the UK Financial Conduct Authority, and the Financial Markets Authority of New Zealand.

 

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