The United States SEC [Securities and Exchange Commission] has charged two Maryland based firms over a Ponzi scheme that illicitly defrauded over 1,200 investors for more than $27 Mln by promising to trade their money on cryptocurrency exchanges.
The defraud firms involved within the fraudulent activities are 1st Million LLC and the Smart Partners LLC that were fake businesses found out to run a Ponzi scheme consistent with the SEC. The report detailed that the business owners who were of African heritage falsely told investors, many of whom were also African immigrants, that their funds would be employed for cryptocurrency trading along with other foreign exchanges.
In line with the report, SEC said the businesses often cited community trust and targeted vulnerable African immigrants by promising them risk-free returns of somewhere in-between 6% to 42% by trading investor funds on cryptocurrency exchanges.
The report further alleged that 1st Million as well as Smart Partners owner Dennis Jali, who claimed to be an expert trader, falsely introduced himself as a self-made millionaire, rented office space to conduct in-person meetings & gave the looks of legal business. These firms diverted investor funds for their private use and form Ponzi payments to earlier investors.
The director of the SEC’s Philadelphia Regional Office, Kelly L. Gibson, added that:
“As alleged within our complaint, the defendants [Jali along with others] exploited religious affiliations and African cultural affinities to gain investors’ trust. We encourage all investors to get on high alert whenever they’re offered investments promising low risk on guaranteed returns, even from members of a trusted community.”
On the other hand, the U.S. officials within the court in Maryland have already charged the fraudsters for violating the United States antifraud provisions.