Litigation: SEC Charges 4 Individuals in Crypto Pyramid Scheme That Targeted Spanish-Speaking Communities

WASHINGTON, Dec. 16 -- The Securities and Exchange Commission issued the following litigation release (No. 1:22-cv-10534; S.D.N.Y. filed Dec. 14, 2022) involving Da Silva, et al.:

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Forcount Trader Systems' Creator and Promoters Orchestrated $8.4 Million Fraud

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On December 14, 2022, the Securities and Exchange Commission charged Francisley Valdevino Da Silva, Juan Antonio Tacuri Fajardo, Ramon Antonio Perez Arias, and Jose Ramiro Coronado Reyes for their roles in creating and promoting Forcount Trader Systems, Inc., a fraudulent crypto asset pyramid scheme that raised more than $8.4 million from hundreds of retail investors primarily from Spanish-speaking communities throughout the United States and other countries.

According to the SEC's complaint, from approximately July 2017 to November 2020, Brazilian national Da Silva and U.S.-based promoters Tacuri, Perez, and Coronado enticed and defrauded investors out of millions of dollars with the promise of guaranteed returns resulting from investments in "memberships" in Forcount Trader Systems. These memberships purportedly gave investors an interest in profits from Forcount's supposed crypto asset trading and mining operations. Investors could also participate in Forcount's referral program, which, as the complaint alleges, incentivized recruiting new victims. The complaint alleges that the defendants knew or were reckless in not knowing that Forcount had no crypto asset trading and mining operations and that the only way the scheme could continue was by increasing the investor base. The defendants allegedly accelerated Forcount's inevitable collapse by misappropriating investor funds to buy themselves homes, cars, and luxury goods.

The SEC's complaint, filed in federal district court in the Southern District of New York, charges the defendants with violating Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The complaint seeks permanent injunctive relief, conduct-based injunctions preventing the defendants from participating in multi-level marketing or crypto asset offerings, disgorgement of ill-gotten gains and prejudgment interest, civil penalties, and officer-and-director bars.

In a parallel action, the U.S. Attorney's Office for the Southern District of New York today announced criminal charges against Da Silva and Tacuri.

The SEC's ongoing investigation is being conducted by Shannon Keyes and Christopher Mele of the SEC's New York Regional Office, and has been supervised by Hane L. Kim of the SEC's Retail Strategy Task Force and Thomas P. Smith, Jr. of the SEC's New York Regional Office. The litigation will be conducted by Ms. Keyes and Mr. Mele. The Commission appreciates the assistance of the U.S. Attorney's Office for the Southern District of New York; the El Dorado Task Force and Securities Investigations Group of Homeland Security Investigations ("HSI") New York; HSI Brasilia; HSI Orlando; HSI Tampa; the Brazilian Federal Police; the Bureau of Financial Investigations of Florida Office of Financial Regulation; the Bureau of Insurance Fraud, Property & Casualty in the Division of Investigative and Forensic Services of the Florida Department of Financial Services; the New York City Sheriff's Office; and the New York City Police Department.

The SEC's Office of Investor Education and Advocacy and Enforcement's Retail Strategy Task Force direct investors to resources on detecting and avoiding pyramid schemes and a Spanish language investor alert, Este al tanto de los Esquemas de Piramides haciendose pasar por Programas de Mercadeo de Niveles Multiples. Investors can find additional information about pyramid schemes at Investor.gov.

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Original text here: https://www.sec.gov/litigation/litreleases/2022/lr25592.htm