An indictment was unleashed on May 5, 2022, charging the CEO of Mining Capital Coin (MCC), an alleged crypto mining and investment platform, for supposedly orchestrating a $62 million global investment fraud scheme.
Assistant Attorney General of the Justice Department’s Criminal Division, Kenneth A. Polite Jr., commented:
“Cryptocurrency-based fraud undermines financial markets worldwide as bad actors defraud investors and limit the ability of legitimate entrepreneurs to innovate within this emerging space. The department is committed to following the money — whether physical or digital — to expose criminal schemes, hold these fraudsters accountable, and protect investors.”
Based on that indictment, Luiz Capuci Jr., 44, of Port St. Lucie, Florida, the CEO and founder of MCC, knowingly misled investors about MCC’s crypto mining and investment program. In this program, investors were enticed to invest in MCC by buying “Mining Packages.”
Under the same program, Capuci and his co-conspirators touted MCC’s purported international network of crypto mining machines as having the ability to generate considerable profits and some guaranteed returns by using the investors’ funds to mine new crypto.
Capuci also said that MCC’s cryptocurrency, Capital Coin, was a supposed decentralized autonomous organization that was:
“Stabilized by revenue from the biggest cryptocurrency mining operation in the world.”
As purported in the indictment, nonetheless, Capuci operated an illegal investment scheme and did not use the investors’ money to mine new crypto, as promised. Instead, he diverted the money to crypto wallets under his control. United States Attorney Juan Antonio Gonzalez for the Southern District of Florida, explained:
“This office is committed to protecting consumers from unscrupulous fraudsters seeking to capitalize on the relative novelty of digital currency. As with any emerging market, those who invest in crypto must beware of profit-making opportunities that appear too good to be true.”
The indictment also asserts that Capuci touted and illegally marketed MCC’s supposed “Trading Bots” as an extra investment mechanism for the investors to invest in the Crypto market. Capuci alleged that MCC joined with:
“Top software developers in Asia, Russia, and the U.S.A. to create an improved version of Trading Bot[s] that [were] tested with new technology never seen before.”
Capuci also represented that MCC’s Trading Bots operated in “very high frequency, being able to do thousands of trades per second,” and that each of MCC’s Trading Bots would generate some enticing daily returns for the investors.
As is the case with the Mining Packages, however, Capuci operated an investment fraud scheme with the said trading bots and was not, as he promised, using MCC Trading Bots to generate income for the investors. Instead, he was diverting the funds to himself and his co-conspirators.
Assistant Director of the FBI’s Criminal Investigative Division, Luis Quesada:
“Virtual currency markets are growing rapidly, and unfortunately so are crypto currency investment scams. The FBI and our law enforcement partners are committed to investigating financial fraud wherever it occurs, including in the virtual currency space.”
Capuci is also said to have recruited several promoters and affiliates to promote MCC and its different investment programs via a multi-level marketing scheme, mostly known as a pyramid scheme. For successfully luring various investors to invest in the scheme, MCC’s network of promoters and affiliates a range of gifts. Some of the gifts on offer include Apple watches, iPads, and luxury vehicles such as a Porsche, Lamborghini, and even Capuci’s personal Ferrari.
Capuci further hid the location and control of the fraud money collected from investors by laundering the money internationally via different foreign-based crypto exchanges. HSI Miami Special Agent in Charge Anthony Salisbury stated:
“This case should serve as a warning to any individuals who look to illegally capitalize on the perceived ambiguity of the emerging crypto market to take advantage of innocent investors. HSI will continue to work with our partners to pursue anyone who utilizes these types of schemes to victimize would-be customers.”
Capuci is charged with his conspiracy to commit securities fraud, conspiracy to commit wire fraud, and conspiracy to commit international money laundering. If he is convicted of all these counts, he faces a maximum penalty of 45 years in prison. The federal district court judge will determine any sentence and taking into account the U.S. Sentencing Guidelines together with other statutory factors.
HSI’s Miami Field Office and the FBI Miami Field Office are investigating this case.
Trial Attorneys Sara Hallmark and Kevin Lowell of the Criminal Division’s Fraud Section together with Assistant U.S. Attorney Yisel Valdes of the Southern District of Florida are prosecuting this case.
