SEC Obtains Assets Freeze Against Crypto Mining for Defrauding Millions from Investors

The United States Securities and Exchange Commission (SEC) reported on Friday, June 5, 2020, that it has secured an asset freeze and other emergency relief against Daniel F. Putnam, Jean Paul Ramirez Rico, and Angel A. Rodriguez, who reportedly deceived investors in two cryptocurrency-related schemes over $12million. Millions were raised by running a multi-level marketing business known as the “Modern Money Team” operated from July 2017 to November of last year.

According to the complaint of the SEC, unsealed at the federal court in Salt Lake City, Putnam invested in crypto-mining equipment until at least July 2017 and subsequently turning to offer investors ‘crypto-currency trading packages.’ Nearly 200 investors joined Putnam’s mining scheme which was promised huge profits through cryptocurrencies mining on “Modern Money Team” operated mining hardware.

Putnam started the Modern Money Team (MMT) and started offering investments in the “crowd-funding of a powerful cryptocurrency mining operation.” MMT’s sought-after investors were able to buy mining machines, operate them in MMT ‘s facilities, and gain money each month from the successful mining of cryptocurrencies through the mining operation.

Investors who wanted to buy actual mining machines were advised that their machines would be placed and controlled remotely at Putnam’s selected locations and that Putnam or those he employed would monitor all mining activitiesPutnam earned around $3.25 million to nearly two hundred investors through the selling of mining machines and the involvement in the mining activity.

After the mining investment program was no longer economically viable, Putnam began offering investors the option to buy “cryptocurrency trading packages” through MMT. Ramirez managed the crypto investments, Rodriguez was the intermediary, and MMT was run by Putnam, a multi-level marketing professional. The   Investors were further informed that their funds would be kept in Bitfinex3 trading accounts controlled by Ramirez, who will be responsible for trading.

Back investor offices reported weekly earnings until November 2019, and investors were able to make regular withdrawals from their accounts. However, in November 2019, the MMT stopped making the proposed profit payments to investors, and the trading activity was halted.

The SEC also claimed that in November 2019, MMT stopped paying investors but managed to collect funds until 9 March 2020. Defendants also misappropriated investor funds for personal use and made similar payments to Ponzi Schemes to former investors. According to the complaint, the defendants carried out these fraudulent schemes through two Utah companies owned by Putnam, MMT Distributions, LLC, and R&D Global, LLC.