CryptoFX LLC Charged By Securities and Exchange Commission (SEC) in Alleged $300 Million Crypto Asset Ponzi Scheme; Victims To Get Their Day in Court

The SEC stated that over 90% of investor funds were allegedly spent on luxury cars, credit cards, jewelry, adult entertainment, and real estate by the company. Iliana Calles mentioned that her family initially witnessed some returns, leading them to invest in the company, only to later become victims of the scheme.

The Securities and Exchange Commission has charged 17 individuals for their involvement in a $300 million Ponzi scheme connected to CryptoFX LLC, a company based in Houston, Texas. The scheme targeted over 40,000 mostly Latino investors in the U.S. and two other countries. This complaint comes after the SEC took emergency action in September 2022 to stop the CryptoFX scheme and charged its two main leaders, Mauricio Chavez and Giorgio Benvenuto.

“We allege that CryptoFX was a $300 million Ponzi scheme that targeted Latino investors with promises of financial freedom and life-altering wealth from ‘risk free’ and ‘guaranteed’ crypto and foreign exchange investments,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement. “In the end, the only thing that CryptoFX guaranteed was a trail of thousands upon thousands of victims stretching across ten states and two foreign countries. A scheme of that size requires lots of participants, and as today’s action demonstrates, we will pursue charges against not just the principal architects of these massive schemes, but all those who further their fraud by unlawfully soliciting victims.”

“After filing the initial charges in this case and obtaining emergency relief, we continued our investigation to identify additional individuals who allegedly played roles in this massive Ponzi scheme,” said Eric Werner, Director of the SEC’s Fort Worth Regional Office.

Our efforts bore significant fruit as the charges and allegations today demonstrate.”

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According to the SEC's complaint, CryptoFX claimed to engage in trading in crypto assets and foreign exchange markets for investors but was actually operating as a Ponzi scheme. The complaint states that from May 2020 to October 2022, the 17 individuals charged from Texas, California, Louisiana, Illinois, and Florida, acted as leaders of the CryptoFX network and solicited investors by promising returns of 15 to 100 percent from CryptoFX's trading activities.

It is alleged that CryptoFX raised $300 million from investors but did not use most of the funds for trading as claimed. Instead, the defendants allegedly used investor funds to pay returns to other investors, to pay commissions and bonuses to themselves and investors, and to fund their own lifestyles.

The complaint also alleges that Gabriel and Dulce Ochoa, spouses and two of the defendants, continued to solicit investments after the court issued orders to halt the CryptoFX scheme in September 2022. Gabriel Ochoa allegedly instructed two investors to rescind their complaints to the SEC in order to recover their investments. Another defendant, Maria Saravia, allegedly told investors that the SEC's lawsuit was fake.

The SEC's complaint, filed in the U.S. District Court for the Southern District of Texas, alleges that Gabriel and Dulce Ochoa, Saravia, Gloria Castaneda, Ismael Zarco Sanchez, and Roberto Zavala violated federal securities laws by engaging in fraud, failing to register securities, and failing to register as brokers.

The complaint also alleges that Gabriel Arguelles, Hector Aquino, Orlin Wilifredo Turcios Castro, Carmen De La Cruz, Elizabeth Escoto, Reyna Guiffaro, Marco Antonio Lemus, Juan Puac, Luis Serrano, Julio Taffinder, and Claudia Velazquez violated securities and broker-registration provisions. Additionally, Gabriel Ochoa is charged with violating whistleblower protection provisions. The SEC is seeking permanent injunctions, disgorgement with prejudgment interest, and civil penalties against each defendant.

Serrano and Taffinder, without admitting or denying the SEC's allegations, agreed to final judgments, pending court approval, that permanently prohibit them from violating federal securities laws' securities-registration and broker-registration provisions. They also agreed to jointly pay over $68,000 in civil penalties, disgorgement, and interest.

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In an interview with KHOU, Outside a federal courthouse in Houston, dozens of people with signs were demanding help after they claim they were scammed by the company.

Pedro Cornejo said he is one of the victims. He said he gave leaders with the company $42,000 to invest in cryptocurrency before they ghosted him.

"These families were specifically targeted and were asked for money upfront to invest in cryptocurrency. Unfortunately, like we have seen all over the country, this quickly fell apart," said FIEL Executive Director Cesar Espinosa.

Court records indicate that the SEC is probing the leaders of the company, Mauricio Chavez and Giorgia Benvenuto, as well as the company itself. Allegedly, they pledged to conduct classes aimed at educating and empowering the Latino community to amass wealth through cryptocurrency trading. A female investor claimed they assured her of a 15% monthly profit on her investment of $25,000. However, the SEC contends that the leaders were operating a Ponzi scheme.

"These families were taken advantage from and stolen of their hard-worked, hard-earned money," Espinosa said.

The SEC stated that over 90% of investor funds were allegedly spent on luxury cars, credit cards, jewelry, adult entertainment, and real estate by the company. Iliana Calles mentioned that her family initially witnessed some returns, leading them to invest in the company, only to later become victims of the scheme.

"It was my grandma, of course I am going to trust her. I've known that she was here for a year or two years. Of course, I would trust her. So I think, in total in our family, we gave over $100,000," Calles said.

Activists said this scheme wasn't just taking place in Houston. According to FIEL, the company was defrauding people all across the United States and even in Latin America.

Now, people are trying to figure out what to do next, without their life savings.

“I invested all of my life savings,” Calles said. “Now, I have to figure out how to pay for things that I wasn't expecting — like my mom's cancer treatment.”

Calles noted that she became aware she might not recover her investment when she found the CryptoFX office consistently closed during her visits to retrieve her money. Despite various explanations like maintenance problems, the office remained inaccessible. Over time, she started encountering other disgruntled investors outside the building.

“If someone approaches you and tells you that you're going to make money without working, that you're gonna make money fast without much effort, that immediately should raise flags,” Suarez said.

"I am trying to figure out how to pay for my mom's chemo, my mom's cancer screening. We had this mattress to fall back on, but my whole family gave to them," Calles said.

Some victims reported being threatened with calls to immigration if they considered reporting to authorities.

The Securities and Exchange Commission, on On September 19, 2022, filed an emergency action to stop an on-going fraudulent and unregistered crypto asset offering targeting Latino investors, run by defendants Mauricio Chavez and Giorgio Benvenuto through a company Chavez founded and controlled, CryptoFX, LLC.

At the SEC's request, the Court issued a temporary restraining order halting the offering, as well as temporary orders freezing assets and granting other emergency relief. After a hearing on September 29, 2022, the Court also granted the SEC's motion for a receiver and extended the asset freeze.

The SEC's investigation was led by Jillian Harris, Carol Hahn, and Jamie Haussecker of the Fort Worth Regional Office, under the supervision of Jim Etri and B. David Fraser. Matthew Gulde is handling the litigation, supervised by Keefe Bernstein.

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