The United States Justice Department announced yesterday, January 29, that 35-year-old Sam Lee, an Australian citizen residing in Dubai, 54-year-old Rodney Burton of Miami and 43-year-old Brenda Chunga Severna Park, Maryland, were charged with “orchestrating a $1.89 billion cryptocurrency fraud scheme.”
To facilitate the scheme, Lee allegedly co-founded HyperFund (also known as HyperTech, HyperCapital, HyperVerse, and HyperNation) and Burton and were promotors of HyperFund.
The Justice Department explained:
According to court documents, from June 2020 to November 2022, Lee and his co-conspirators allegedly offered and sold investment contracts to the public through HyperFund’s online investment platform.
HyperFund’s promotional materials allegedly made various false claims, including that investors who purchased HyperFund “memberships” would receive between 0.5% to 1% daily in passive rewards until the company either doubled or tripled the investor’s initial investment.
To convince investors that HyperFund could make such payments, HyperFund allegedly claimed that its payments would be disbursed in part from its revenues from large-scale crypto mining operations, when in truth, HyperFund did not have such operations. Beginning in at least July 2021, HyperFund allegedly began to block investor withdrawals.
Commenting further on HyperFund’s activities, Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division said, “The defendants falsely represented that investors would receive substantial returns paid from cryptocurrency mining operations, which did not in fact exist.”
The specific charges faced by the parties, according to the Justice Department, are as follows:
- Lee was charged with one count of conspiracy to commit securities fraud and wire fraud. If convicted, he faces a maximum penalty of five years in prison.
- Burton was charged with a criminal complaint with one count of conspiracy to operate an unlicensed money-transmitting business and one count of operating an unlicensed money-transmitting business. He also faces a maximum penalty of five years in prison on each count.
- Chunga pleaded guilty to one count of conspiracy to commit securities fraud and wire fraud. She faces a maximum penalty of five years in prison.
A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The Justice Department said that if you believe you are a victim in this case, please get in touch with the Fraud Section’s Victim Witness Unit toll-free at (888) 549-3945 or by email at [email protected]. To learn more about victims’ rights, please visit www.justice.gov/criminal/criminal-vns/victim-rights-derechos-de-las-v-ctimas.
(Source: United States Justice Department)
