Posted February 6, 2018
Investors must be very careful how they handle other people’s money or investments. One investment company, The Entrepreneurs Headquarters, was recently accused of swindling $1.1 million worth of bitcoin from some 600 investors. The company and its owner, who is from Longmont, were formally charged with the crime last week.
The crime was alleged as a “fraudulent Ponzi-style scheme.” Charges included misappropriation of funds and failing to register TEH with the U.S. Commodity Futures Trading Commission.
According to the CTFC, investors were told their bitcoin investments would be pooled and reinvested in a variety of options, but no investing ever actually took place. Alleged trading profits, they say, were fictitious.
The defendants stopped making regular payments to their clients, and allegedly, the fraud became clear after the owner posted a private Facebook message saying that the company had been hacked. As investors requested refunds, some were honored and some were not. Communication with TEH began to dwindle becoming less and less frequent.
One investor, who claims to have invested $50,000 worth of bitcoin with the company, believes with the recent rise in bitcoin’s market value, his investment would be worth more than $1 million by now. He does not expect that he will ever see his funds recovered because he says the company no longer has any money to repay.
The CFTC alleges that the funds were used as payment to other investors. They are seeking restitution from the defendants, as well as penalties and trading bans from future business ventures.
Fraud is a serious charge, but like any other crime, there must be clear evidence that there was deliberate intention involved. Anyone charged with this type of white collar crime will need a good defense team to make sure all facts are brought to light. A conviction of guilty can be life-changing in more ways than one. Financial ruin, as well as slander of one’s reputation, can make it difficult to continue doing business in any capacity.
Source: Daily Camera Boulder County Business, “Longmont man defrauded investors of $1.1M in Bitcoin Ponzi scheme, feds charge,” by Shay Castel, Jan. 22, 2018