Fraudulent Bitcoin Scammers Ordered by Texas Court to Pay $400K
By Mark Lemon – Cryptocurrency Dealer
On July 10, the United States Commodity Futures Trading Commission (CFTC) announced that two defendants were ordered by the Texas Federal Court to pay $400,000 for running an illegal scheme to mislead the general public into using their platform to buy and sell Bitcoin.
On June 28, 2019, Reed C. O’Connor, judge of the U.S. District Court for the Northern District of Texas, filed an Order and Default Judgment which alleges that Kim Hecroft and Morgan Hunt had conducted a fraudulent scheme to solicit Bitcoin from the community. They then would sell Bitcoin or use it to invest in trading products such as diamonds, foreign currency contracts, and binary options. The defendants allegedly carried out this scheme through entities such as First Options Trading and Diamonds Trading Investment House.
The order says the defendants conducted a number of illicit activities including, falsely claiming to use customer funds to invest in trading for their benefit, misrepresentation of their experience and record as traders and portfolio managers, falsely telling customers they could not withdraw their investment profits without paying a tax to the CFTC, which they do not collect and misappropriated customer funds. Any individual that looked to sell cryptocurrency or invest in the companies lost their coins or investment.
As a result, the court now asks both Hecroft and Hunt to pay restitution, a $180,000 civil monetary penalty separately and imposing permanent registration and trading bans. The defendants, however, per the announcement, may be unable to pay the victims due to lack of sufficient funds.
The CFTC had filed a complaint in the middle of June with the New York Southern District Court against the now inactive UK-based Control-Finance Ltd, which was said to have scammed more than 1,000 investors to solicit a minimum of 22,858 BTC. The duo was looking to sell Bitcoin to the markets to invest in other trading products.
With any investment, always carry out extensive due diligence on the company, project and those members of the operation.