The Department of Justice indicted Mining Capital Coin CEO Luiz Capuci Jr. for “alleged orchestration of a $ 62 million global investment fraud scheme,”[ads1]; the agency said Friday.
Mining Capital Coin, or MCC, is a mining and investing platform for cryptocurrency. Capuci, who is from Port St. Lucie, Florida, has allegedly misled investors by selling “Mining Packages”, promising significant returns from the extraction of new cryptocurrencies in what the MCC described as their international network of crypto miners, according to the DOJ’s press release.
According to a US Securities and Exchange Commission complaint filed last month, Capuci has been selling mining packages to more than 65,000 investors since at least January 2018. The group promised a daily return of 1% for up to one year, the SEC press release states.
But instead, the DOJ claims, Capuci directed the funds to its own cryptocurrency wallets. MCC received at least $ 8.1 million from the sale of the mining packages and $ 3.2 million in start-up fees, which financed a lavish lifestyle, including Lamborghinis, a yacht and real estate, according to the SEC complaint.
“Cryptocurrency-based fraud is undermining financial markets around the world as bad players defraud investors and limit the ability of legitimate entrepreneurs to innovate in this new area,” said Assistant Attorney General Kenneth A. Polite, Jr. at the criminal department of the Ministry of Justice.
CNN Business has contacted Capuci for comment.
Capuci also announced MCC’s own cryptocurrency, “Capital Coin”, according to the DOJ’s press release. The release claims another fraudulent MCC investment route, “Trading Bots”, which Capuci claimed operated at “very high frequency, and could make thousands of trades per second.” Capuci claimed that the trade fines would provide daily returns, according to the DOJ publication.
Capuci allegedly also ran a pyramid scheme, according to the DOJ, and recruited promoters to sell the mining packages and promised them gifts ranging from Apple watches to Capuci’s personal Ferrari, the press release states.
The DOJ accused Capuci of conspiracy to commit electronic fraud, conspiracy to commit securities fraud and conspiracy to commit international money laundering. He can risk up to 45 years in prison if he is convicted of all counts. The FBI Miami Field Office and Homeland Security Investigations are investigating the case.
The Ministry of Justice has charged others this year with operating counterfeit cryptocurrency schemes. In February, a federal grand jury in San Diego indicted the founder of BitConnect for allegedly orchestrating a $ 2.4 billion global Ponzi scheme.