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Another Crypto Imbed Ponzi Scheme Bashed By CFTC & SEC

Civil enforcement action in the United States District Court for the District of Maryland has filed against three fraudsters who displayed a $28 million crypto Ponzi scheme and targeted over 1000 naïve investors and traders from the church communities.

According to the United States Attorney’s Office of the District of Maryland, the defrauders would face federal indictment on the nefarious foul play that piloted for personal lavish lifestyle via wealth management and financial literacy company.

In a press release, the Commodity Futures and Trading Commission (CFTC) on Aug 28 mentioned about the crime committed by South African citizens named Dennis Mbongeni Jali, age 35, Arley Ray Johnson, age 61, and John Erasmus Frimpong, age 40,

of Maryland and the “charges of conspiracy, wire fraud, securities fraud, and money laundering enacted by the U.S. federal grand jury.” 

Crypto Ponzi Scheme for Lavish Lifestyle

The three defendants deceitfully solicited the funds from the South African nationals by creating an understanding to benefit them by profiting over 30% “risk-free” returns on their invested capital in a so-called “1st Million Pool or 1st Million Dollars.”

The defendants created three companies namely 1st Million LLC, Smart Partners LLC, and Access to Assets LLC which were used in the felony.

Reportedly, from the past three years, the defendants allegedly presenting themselves as pastors to the victims and befooling them to invest in the sham money pool which would be operated by the trained traders to further trade in foreign currency (forex) and cryptocurrencies to multiply the profits 6 to 5 times.

However, the funds were used for personal use and to create the Ponzi scheme up to almost $18 million. The activities were done to dupe the victims and to the illusion of profitability.

Allegedly, the money pool was controlled by the sole owner of 1st Million LLC and the prime offender Dennis Jali. Jali portrayed himself as an active trader and convinced the members by showing his fake proven track record of positive returns.

The CFTC document reads:

Jali told certain participants that he had achieved positive returns of over 1700%’ … and “proclaimed in an online promotional video that his trading had generated returns of “400% in six weeks, all live trading in real markets” and that he was so successful a “forex trader” that “my wife has never worked a day in her life.”

The 1st Million LLC (money pool) was created by Jali in Delaware on January 12, 2017.

The leading criminal fled the U.S. during May 2019, though later got arrested in South Africa. The Department of Justice is in the process to bring Jali to justice in the United States.

FBI Special Agent in Charge Jennifer Boone mentioned, “In a time of such financial insecurity, the defendants allegedly preyed on their victims with false hope of financial security. They used the victims’ hard-earned money for luxury cars, private jets, and family vacations while the victims ended up with false promises and empty hopes.”

“In parallel actions, the U.S. Attorney’s Office for the District of Maryland today announced the filing of criminal charges and the U.S. Commodity Futures Trading Commission (CFTC) filed a civil action.”

“The SEC’s complaint, filed in federal court in Greenbelt, Maryland, charges the defendants with violating the antifraud provisions of the federal securities laws and seeks permanent injunctive relief, the return of allegedly ill-gotten gains with prejudgment interest, and civil penalties.” 

Read here about an alleged crypto exit scam took place via Dark Web Marketplace