The U.S. District Court for the Northern District of Illinois has ordered an Oregon resident and his entities to pay more than $209 million in penalties for operating Ponzi schemes disguised as cryptocurrency and carbon investment schemes. This includes restitution, the return of illegal profits, and civil penalties. The Commodity Futures Trading Commission (CFTC) has recovered $18 million in stolen digital assets to return to investors.
Judge Orders $209 Million Fine in Crypto Ponzi Scam Case
The Commodity Futures Trading Commission (CFTC) reported on Tuesday that Judge Mary Rowland of the U.S. District Court for the Northern District of Illinois ordered Oregon resident Sam Ikkurty and several of his entities to pay a penalty of $209,614,892.
The entities involved include Jafia LLC, Ikkurty Capital LLC, Rose City Income Fund I LP, Rose City Income Fund II and Seneca Ventures LLC. The court’s decision was based on findings of fraudulent solicitation and misappropriation in what the CFTC described as Ponzi schemes masquerading as cryptocurrency and carbon investment programs.
CFTC Director of Enforcement Ian McGinley describes:
The defendants described their programs as cutting-edge cryptocurrency and carbon investments when in reality they were just outdated Ponzi schemes.
The judgment requires Ikkurty to pay $83.7 million in restitution to investors, which will offset the $36.9 million in illicit gains. He must also pay a civil penalty of $110.9 million. In addition to these amounts, Ikkurty faces a contempt penalty of $14 million for unlawfully transferring digital assets from the Trustee Estate during the proceedings. The order also requires him to repay $884,788 in professional fees that were advanced by the Trustee Estate to cover his defense costs.
Enforcement Director McGinley emphasized the significance of the ruling, noting that the CFTC has recovered $18 million in stolen digital assets that will be returned to defrauded investors. He said:
Not only did CFTC staff stop the defendants’ fraudulent schemes and obtain a judgment in the amount of more than $200 million, they also recovered more than $18 million in stolen digital assets that otherwise might have been lost forever.
What do you think of the court’s decision to impose a fine of more than $209 million for operating a fraudulent cryptocurrency investment scheme? Let us know in the comments below.
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