CFTC & SEC Charges First South African Individual In Bitcoin 'Ponzi Scheme'.

CFTC & SEC Charges First South African Individual In Bitcoin 'Ponzi Scheme'.

2020-09-05 | Eddy Morgan

CFTC & SEC Charges First South African Individual In Bitcoin 'Ponzi Scheme'.

South African individual has been charged with Bitcoin fraud within the Maryland District Court for allegedly scamming $28 million from over 1k investors.

A former resident of Maryland, Dennis Jali, targeted church-going African immigrants, promising them guaranteed returns on his supposed Bitcoin [BTC] & foreign currency investment pool.

Within an official press release, the United States CFTC [Commodity Futures Trading Commission], as well as SEC [Securities and Exchange Commission], added that they jointly charged Jali and two accomplices for orchestrating the “Ponzi scheme”.

Arley Ray Johnson and John Frimpong, both residents of Maryland, illegally solicited money from investors, who contributed $28 Mln to 3 firms - 1st Million LLC, Smart Partners LLC, & Access to Assets LLC, it added.

The duo compelled participants to trade Bitcoin [BTC] & forex via pooled trading accounts managed by Jali, added the statement. The alleged scheme operated from 2017 to 2020, drawing-in over 1,000 investors.

Investors were led to sign “secure contracts” that promised guaranteed returns of up to 30% per month. The conspirators allegedly told investors that their funds would be fully restored at the end of the pool participation term.

Johnson and Frimpong also touted Jali as an excellent career trader who had made 1,700% in returns during previous investment funding. The South African claimed in his web promotional videos that he had returned over 400% in gains in just 6 weeks & “my wife has never worked a single day in her life.”

However, the trio didn't invest any of the money into bitcoin or foreign currency, consistent with the CFTC charge. Instead, they turned the scheme into a Ponzi, using $18 Mln to pay selected investors, creating the illusion of profitability. Jali and his co-conspirators allegedly employed $7 Mln of the pool money to purchase luxury cars & fund other expensive lifestyles.

The CFTC charge is seeking full restitution to defrauded investors, dissolving illegally gotten gains, civil monetary penalties, and permanent trading bans for the three. The SEC also named Access to Assets as a relief defendant, “seeking the return of proceeds of the alleged scam to which it had no legitimate claim.”

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