As was reported yesterday the founders and promoters of Hyperfund, an alleged $1.89 billion crypto fraud, face both a civil action by the Securities and Exchange Commission as well as criminal charges brought by the US Department of Justice.
Sam Lee has been charged in an indictment for allegedly co-founding HyperFund, also known as HyperTech, HyperCapital, HyperVerse, and HyperNation. Rodney Burton and Brenda Chung were said to be promotors of HyperFund.
Acting Assistant Attorney General Nicole M. Argentieri of the DOJs Criminal Division, said the allegations indicate the defendants falsely represented that investors would receive substantial returns paid from cryptocurrency mining operations, which did not in fact exist.
““With our partners in Homeland Security Investigations and IRS Criminal Investigation, we are committed to uncovering sophisticated frauds involving cryptocurrency and digital assets and bringing those who perpetrate them to justice.”
U.S. Attorney Erek L. Barron for the District of Maryland called the alleged fraud “staggering.”
Allegedly, from June 2020 to November 2022, Lee and his co-conspirators reportedly offered and sold investment contracts to the public through HyperFund’s online investment platform. The scheme is said to have promoted that investors who purchased HyperFund “memberships” would receive between 0.5% to 1% daily in passive rewards until the company either doubled or tripled the investor’s initial investment.
HyperFund allegedly claimed that its payments would be disbursed in part from its revenues from large-scale crypto mining operations, which apparently did not exist. In 2021, HyperFund allegedly began to block investor withdrawals.
Lee is charged with one count of conspiracy to commit securities fraud and wire fraud. If convicted, he faces a maximum penalty of five years in prison.
Burton is charged by criminal complaint with one count of conspiracy to operate an unlicensed money transmitting business and one count of operating an unlicensed money transmitting business. He also faces a maximum penalty of five years in prison on each count.
Chunga has pleaded guilty to one count of conspiracy to commit securities fraud and wire fraud. She is scheduled to be sentenced on May 1 and faces a maximum penalty of five years in prison.
