The
U.S.
Department
of
Justice
in
Washington,
D.C.,
June
20,
2023.
Kevin
Dietsch
|
Getty
Images
News
|
Getty
Images
The
Department
of
Justice
on
Monday
announced
criminal
charges
against
two
people
and
the
guilty
plea
of
a
third
person
for
orchestrating
a
worldwide
$1.9
billion
cryptocurrency
Ponzi
fraud
scheme
known
as
HyperFund,
among
other
names.
The
Securities
and
Exchange
Commission,
in
a
related
civil
action,
charged
two
of
those
individuals
for
their
involvement
in
the
alleged
crypto
pyramid
scheme,
which
collapsed
in
2022.
The
three
defendants
charged
by
the
DOJ
falsely
claimed
that
investors
in
HyperFund
would
receive
“substantial
returns
paid
from
cryptocurrency
mining
operations,
which
did
not
in
fact
exist,”
said
acting
Assistant
Attorney
General
Nicole
Argentieri of
the
DOJ’s
Criminal
Division.
“The
level
of
alleged
fraud
here
is
staggering,”
said
Erek
Barron,
the
U.S.
Attorney
for
Maryland.
Charged
in
the
criminal
case
were
Sam
Lee,
an
Australian
citizen
who
lives
in
Dubai,
United
Arab
Emirates,
who
is
accused
of
co-founding
HyperFund,
as
well
as
two
HyperFund
promoters,
Rodney
Burton
of
Miami,
and
Brenda
Chunga
of
Severna
Park,
Maryland.
Lee,
a
35-year-old
also
known
as
Xue
Lee,
is
charged
with
a
single
count
of
conspiracy
to
commit
securities
fraud
and
wire
fraud.
Burton,
54,
who
is
also
known
as
“Bitcoin
Rodney”
is
charged
with
one
count
of
conspiracy
to
operate
an
unlicensed
money-transmitting
business
and
another
count
of
operating
an
unlicensed
money-transmitting
business.
Both
men
face
a
maximum
possible
sentence
of
five
years
in
prison
if
convicted.
Chunga,
who
is
also
known
as
Bitcoin
Beautee,
pled
guilty
Monday
to
one
count
of
conspiracy
to
commit
securities
fraud
and
wire
fraud,
for
which
she
faces
the
same
possible
maximum
sentence.
Chunga
separately
agreed
to
settle
civil
charges
by
the
SEC
for
violating
the
anti-fraud
and
registration
provisions
of
U.S.
securities
laws.
As
part
of
that
settlement,
she
agreed
to
disgorge
money
she
made
in
the
scheme
and
civil
fines
to
be
determined
later.
The
SEC
complaint
says
she
received
more
than
$3.7
million
from
both
the
HyperFund
platform
and
from
investors.
“She
used
her
earnings
to
fund
extravagant
personal
expenses
and
help
recruit
others
into
the
scheme
by
showing
off
the
potential
wealth
to
be
earned
through
HyperFund,”
the
complaint
said.
Lee
was
charged
by
the
SEC
with
the
same
violations.
HyperFund
was
also
known
as
HyperTech,
HyperCapital,
HyperVerse
and
HyperNation.
The
DOJ
alleges
that
from
June
2020
through
November
2022,
Lee
and
his
co-conspirators
sold
investment
contracts
online
through
HyperFund’s
platform
and
claimed
that
investors
would
earn
returns
of
between
.5%
and
1%
each
day
until
their
original
investment
was
either
doubled
or
tripled
through
revenue
from
large-scale
crypto
mining.
In
July
2021,
HyperFund
began
to
block
withdrawals
by
investors,
the
DOJ
alleges.
