The US Securities and Exchange Commission, or SEC, has recently continued its action against crypto scammers at large. On Friday, the regulator had announced an asset freeze, as well as other emergency relief measures, against two alleged crypto-related schemes totaling in $12 million. This scheme was operated by Jean Paul Ramirez Rico, Daniel F. Putnam, and Angel A. Rodriguez, according to the SEC.
New Scam; Same Motivations
The SEC’s complaint, which was unsealed on the 5th of June, 2020, was filed in Salt Lake City’s federal court. The complaint alleged that Putnam had operated a multilevel marketing organization by the name of “Modern Money Team” since July of 2017.
He used this company to sell interests within a purported crypto mining operation, holding almost two hundred investors in the end. The complaint went further, claiming that Putnam had misappropriated a portion of these investor funds, rather predictably spending it on personal expenses.
Further Crypto Trading Fraud
The complaint went further, alleging that Putnam, as well as Rodriguez and Ramirez, raised more funds by offering a “cryptocurrency trading package” to these investors, as well. As one would imagine, these packages were claimed to hold a high potential for substantial returns. The reality, however, is that the defendants then misappropriated these investor funds for personal use, according to the allegations.
Furthermore, the group leveraged a distribution process, much like a Ponzi scheme, giving funds to earlier investors to add validity to the scheme. As per the complaint’s claims, the scheme was operated through two companies that Putnam controlled, based in Utah: LLC and R & D Global, LLC, as well as MMT Distributions LLC.
The List Of Charges
The complaint officially charged MMT Distribution, R & D Global, as well as Ramirez, Rodriguez, and Putnam with the violation of antifraud provisions. In particular, they violated Section 10(b) and Rule 10b-5 thereunder of the Securities Exchange Act of 1934 and Section 17(a) of the Securities Act of 1933, as well.
Further allegations within the complaint have charged Putnam and Ramirez, in particular, as well as MMT distribution. These charges concerned with violating the registration provisions stated in Sections 5(a) and 5(c) of the Securities Act. The complaint named Richard T. Putnam, the father of the accused, as a relief defendant, as well.
The SEC is going full-force in this action. The regulator is demanding permanent injunctions, civil penalties, as well as disgorgement of ill-gotten gains with prejudgment interest.