Rodney Burton, aka “Bitcoin Rodney”, was arrested in Florida on January 4th, 2024.
Burton has been indicted on HyperFund fraud charges, filed as part of a wider criminal case in Maryland. Following Burton’s arrest, he made his initial appearance in the Southern District of Florida.
Burton (below👇🏾) was ordered moved to the District of Maryland, where multiple HyperFund related indictments are believed to have been filed under seal.
An IRS agent affidavit filed in support of Burton’s Complaint cites a “network of HyperFund promoters”, but at this stage it’s unclear who else has been charged.
Presumably the broader HyperFund criminal case extends to co-founders Ryan Xu (aka Zijing Xu) and Sam Lee (aka Xue Lee).
Getting back to Burton, on January 5th he invoked his right to remain silent. Then on January 8th the DOJ moved to reseal the original docket filing (details of the case).
This was approved later the same day. Thankfully Sarah Martin at the Guardianwas able to access the filing between Burton’s arrest and the resealing. She was kind enough to provide BehindMLM a copy.
As per the IRS supporting affidavit, Burton, as a promoter of HyperFund, has been charged with:
operating an unlicensed money transmitting business and
conspiracy to commit operating an unlicensed money transmitting business
The joint IRS-DOJ investigation into HyperFund is part of a broader investigation into the HyperTech Ponzi schemes.
These Ponzi schemes include:
HyperCapital – launched in 2020 following the collapse of HyperCash;
HyperFund – launched later in 2020 following the collapse of HyperCapital;
Hyperverse – launched in 2021 following the collapse of HyperFund; and
HyperNation – launched in 2022 following the collapse of Hyperverse
HyperNation itself collapsed in May 2023. In July 2023 Sam Lee claimed he was “rebuilding Hyperverse” but, as far as I know, nothing came of it.
Cited as part of a “network of HyperFund promoters, the IRS affidavit states Burton and his co-conspirators
made fraudulent promotional presentations to investors and potential investors.
In those presentations, promoters touted HyperFund’s investment programs, including the purported returns that prospective investors could earn from investing with HyperFund.
Among other representations, HyperFund falsely claimed that investors who purchased “memberships” would receive between 0.5% to 1% daily in passive rewards until HyperFund doubled or tripled the investor’s initial investment.
HyperFund did not have any such operations.
To the extent investors saw the accrual of any rewards, those investors were paid with funds collected from more recent investors.
Beginning in or about July 2020—shortly after HyperFund was established—and through in or about January 2022, BURTON accepted U.S. dollars from investors in HyperFund, in the form of checks or wire transfers.
In exchange for those payments and a three percent fee, BURTON transferred a purportedly equivalent amount of Tether cryptocurrency and/or HU from his HyperFund account to the investors’ HyperFund accounts.
BURTON communicated with other HyperFund promoters regarding accepting U.S. dollars in exchange for Tether and/or HU.
He advised Individual 1, a resident of Anne Arundel County and another HyperFund promoter, to instruct investors to send U.S. dollars (via wire or check) with the memo line “Consultation/Training,” even though no consulting services were rendered.
BURTON told Individual 1 that the reason for so instructing investors was to avoid drawing scrutiny from banks, as the banks might shut down their accounts.
On April 14, 2021, at 8:52 a.m., Individual 2 texted BURTON “to make sure nothing is going on with Hyperfund” because, among other reasons “[y]ou said don’t send anymore money up let you catch up.”
Two minutes later, at 8:54 a.m., BURTON responded saying “Lol, no nothing is wrong. I said let me catch up cause
I got so many checks that ppl are sending me. I’m adding to my portfolio. I still haven’t finished funding the ones I got.”
From this we can surmise that these co-conspirators are cooperating with authorities (as per the original motion to seal Burton’s Florida docket, Burton was unaware of the case prior to his arrest). Whether the cited individuals have also been arrested remains unclear.
In March 2021, one Maryland victim cited in the affidavit lost $40,000 via wire transfer to Burton Holdings Co. An additional $10,000 was then wired to The Bit Group LLC.
In April 2021, the victim’s wife would go on to wire an additional $20,500 to Burton Holdings Co.
While this is unlikely to be the total amount Burton stole through the HyperTech Ponzi schemes, the IRS affidavit pegs initial ill-gotten gains at $7.8 million.
I have reviewed bank records associated with BURTON’s personal bank accounts and the accounts for the companies over which he has control.
Analysis of these records show that from June 2020 through January 2022, BURTON received 562 wire transfers or cashier’s checks, totaling $7,851,711, from individuals who wished to invest in HyperFund.
An analysis of these payments shows that they originated from investors in the District of Maryland and at least twenty-six other states, one U.S. territory, and Canada.
The majority of funds Burton stole through HyperFund were laundered through Burton Holdings Co., a shell company registered in Maryland.
If convicted, Burton faces up to five years on both criminal counts.
Beyond there most certainly being other HyperTech related indictments still under seal, that’s all we know for now. I have a number for Burton’s Maryland case but the docket and filings are still under seal.
It’s assumed we’ll get more details pending further HypterTech related arrests.
