30 January 2024- Three individuals are charged in U.S. District Court in Maryland for orchestrating a $1.89 billion cryptocurrency fraud scheme.
A federal grand jury has returned an indictment charging Sam Lee, age 35, an Australian citizen residing in the United Arab Emirates for allegedly co-founding HyperFund, also known as HyperTech, HyperCapital, HyperVerse, and HyperNation. The indictment was returned on January 25, 2024, and unsealed today. Co-conspirator Rodney Burton, a/k/a “Bitcoin Rodney,” 54, of Miami, Florida, is charged by criminal complaint for his role as an alleged promoter of HyperFund. Co-conspirator Brenda Chunga, 43, of Severna Park, Maryland, pleaded guilty today to her role in the fraud scheme.
The federal charges were announced by United States Attorney for the District of Maryland Erek L. Barron; Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division; Acting Special Agent in Charge Erin Keegan of Homeland Security Investigations (“HSI”) New York; and Acting Special Agent in Charge David Meisenheimer of the Internal Revenue Service – Criminal Investigation (“IRS-CI”), Washington, D.C. Field Office.
“The level of alleged fraud here is staggering,” said U.S. Attorney Erek L. Barron. “Whether it’s cryptocurrency fraud, or any other financial frauds, if it sounds too good to be true, it probably is. This office and our law enforcement partners will hold perpetrators accountable for these and other fraud schemes.”
“The defendants are charged with defrauding investors to the tune of $1.89 billion. As alleged in court documents, the defendants falsely represented that investors would receive substantial returns paid from cryptocurrency mining operations, which did not in fact exist,” said Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division. “With our partners in Homeland Security Investigations and IRS Criminal Investigation, we are committed to uncovering sophisticated frauds involving cryptocurrency and digital assets and bringing those who perpetrate them to justice.”
“Today’s charges are a testament to the incredible work of HSI New York’s El Dorado Task Force,” said Acting Special Agent in Charge Erin Keegan of Homeland Security Investigations (HSI) New York. “I commend our law enforcement partners, including those at HSI Baltimore, for their outstanding collaboration. HSI will continue to protect American investors from financial predators.”
“The illegal activity alleged in this case is precisely the type of conduct IRS Criminal Investigation and our law enforcement partners are committed to deterring,” said David Meisenheimer, Acting Special Agent in Charge of the Internal Revenue Service – Criminal Investigation Washington, D.C. Field Office. “These charges send a clear message that we have the tools and internal fortitude, to protect our financial systems by diligently investigating, prosecuting, and holding accountable, those who seek to defraud the American public.”
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.
If convicted, Lee faces a maximum sentence of five years in federal prison for conspiracy to commit securities fraud and wire fraud. Burton has been arrested on a criminal complaint charging him with one count of conspiracy to operate an unlicensed money transmitting business and one count of operating an unlicensed money transmitting business. At a detention hearing today before U.S. Magistrate Judge Erin Aslan in U.S. District Court in Baltimore, Maryland, Burton was ordered to be detained. If convicted, he also faces a maximum penalty of five years in prison on each of those counts.
Brenda Chunga, a/k/a “Bitcoin Beautee,”pleaded guilty today to conspiracy to commit securities fraud and wire fraud, for her role as a promoter of HyperFund. According to her plea agreement and other court documents, Chunga conducted online investor meetings, including in Maryland, to promote HyperFund’s investment programs and which detailed the purported returns that prospective investors could earn from investing in HyperFund. Chunga admitted that she personally received at least $3 million in fraud proceeds from her participation in the conspiracy. As detailed in her plea agreement, Chunga will be required to pay restitution in the full amount of the victims’ losses, which the parties agree is at least $3 million, but could be significantly higher. Chunga faces a maximum penalty of five years in prison. U.S. District Judge Richard D. Bennett has not yet scheduled a sentencing date.
Neither an indictment nor a criminal complaint is a finding of guilt. An individual charged by indictment or criminal complaint is presumed innocent unless and until proven guilty at some later criminal proceedings.
If you believe you are a victim in this case, please contact the Fraud Section’s Victim Witness Unit toll-free at (888) 549-3945 or by email at email@example.com. To learn more about victims’ rights, please visit www.justice.gov/criminal/criminal-vns/victim-rights-derechos-de-las-v-ctimas.