The federal government is taking aim at a Houston-based company for allegedly scamming Latino investors out of millions of dollars in a cryptocurrency Ponzi scheme.
On September 19, the U.S. Securities and Exchange Commission (SEC) filed an emergency action against Houston based company CryptoFX LLC for allegedly using investor funds to support Mauricio Chavez’s “extravagant lifestyle” and finance a real estate company called CBT Group that Chavez co-owned with Giorgio Benvenuto.
The compliant names CryptoFX, Chavez and Benvenuto as defendants.
During a press conference on Wednesday, Houston resident Iliana Calles said she and her family gave about $100,000 to CryptoFX after being told that their investment would mean big returns.
“My whole family gave to this because these people learn how to play with everyone,” Calles said. “They knew how to manipulate people, they knew what groups to go after, and it worked.”
According to the SEC, Chavez created CryptoFX in February 2020 with the intention of teaching the Latino community about cryptocurrency investing, despite having “no formal education or training in securities training or investments.”
The company offered classes ranging from $499 to $1,499 and eventually began accepting money from investors in order to make crypto trades on their behalf.
However, about 90% of the more than $12 million received from thousands of unwitting investors was spent on cars, credit card payments and travel expenses, with over $15,000 spent at adult-entertainment establishments, according to the SEC.
Most of the money — nearly $8 million — was diverted to CBT Group and used to purchase property and pay title companies, homebuilders and contraction companies, according to the SEC.
The SEC’s compliant charges Chavez, Benvenuto, and CryptoFX with violating the Securities Act of 1933 and the Securities Exchange Act of 1934. The complaint also charges Chavez with violating the Investment Advisers Act of 1940, and Chavez and CryptoFX of violating the securities registration provisions of the Securities Act.
Read the full SEC compliant below:
