August 31, 2020
Charity scams under cover of religion are prevalent. But recently, there has been a change of pace.
Signs show that there is no stopping of illicit investment scams in the crypto industry.
Posing as religious and government workers, three conmen pitched a crypto investment scam that raised $27 million from innocent church-goers and some hopeful investors in the US, stated the US Securities and Exchange Commission in a federal complaint released last Friday.
The SEC claims that Dennis Mbongeni Jali, John Erasmus Frimpong and Arley Ray Johnson had lured victims, together with them are Maryland church pastors, church-goers and doctors, with a crypto trading bot that would give them high-interest rates on their investors.
For the so-called “1st Million” company they targeted attendees from church functions. They portrayed themselves as “more interested in the philanthropic financial freedom of others as personal financial gain,” according to court documents.
However, instead of making big on their promise to customers and helping with charitable causes, the trio ran a Ponzi scheme, alleged the SEC. They used newly raised funds from new investors to pay old investors. This method makes it seem to look like the trading bot is working. After that, they used the rest of the money to fund a lavish lifestyle that included luxury cars, private jets, and family vacations, according to SEC.
Investigators stated that the men had elevated about $28 million from over 1,200 investors using the scheme starting from 2017 to mid-2019. During press time, the 1st Million perpetuators await trial in the US for deceiving investors, as the complaint addresses.
The suspected scam is comparable to Bitconnect’s recently busted 10% monthly payout promise to its investors in 2018. Forsage, another going Ethereum-based Ponzi scheme, also uses the same narrative-that of promising massive crypto returns utilizing smart contract trading bot.
While Bitconnect confronted legal action in the US and was promptly shut down by authorities in 2018, Forsage continues to be alive and well, regardless of facing court action in the Philippines. Investors are not Forsage’s only victims, nevertheless. The illegal firm has congested up the Ethereum network and is the second-highest Gas guzzler as per pursuing site ETH Gas Station.