The Justice Department has charged two individuals and accepted the guilty plea of a third for masterminding a massive $1.89 billion cryptocurrency fraud scheme.
Sam Lee, 35, an Australian citizen living in Dubai, is accused of co-founding the online investment platform HyperFund, which is described as “too-good-to-be-true.” Rodney Burton, 54, from Miami, and Brenda Chunga, 43, from Maryland, served as promoters of HyperFund.
Court documents reveal that HyperFund allegedly made numerous false claims in its promotional materials, including that investors who bought HyperFund “memberships” would earn between 0.5% to 1% daily in passive rewards until their initial investment doubled or tripled. To persuade investors of its ability to make these payouts, HyperFund claimed that funding would come from extensive crypto mining operations, which, in reality, the company did not possess. By July 2021, HyperFund reportedly started blocking investor withdrawals.
U.S. Attorney Erek L. Barron for the District of Maryland commented, “The level of alleged fraud here is staggering. Whether it involves cryptocurrency or other financial schemes, if it sounds too good to be true, it probably is. Our office and law enforcement partners will ensure that offenders are held accountable for these fraud schemes.”
Lee faces one count of conspiracy to commit securities fraud and wire fraud, which could result in a maximum prison sentence of five years if convicted. Burton is charged with one count of conspiracy to operate an unlicensed money transmitting business and one count of operating such a business, each carrying a potential penalty of five years in prison. Chunga has pleaded guilty to conspiracy to commit securities fraud and wire fraud and also faces up to five years in prison.