The DOJ accused Mining Capital Coin CEO and founder Luiz Capuci Jr. of conducting a $62 million global investment scam conspiracy in an allegation released yesterday. He’s the most recent of numerous crypto corporate executives to suffer similar charges.
Capuci convinced investors to buy “Mining Packages,” a global network of bitcoin miners that guaranteed a weekly return on investment through his company. Rather than mining cryptocurrencies with investor funds as agreed, the DOJ claims Capuci transferred the funds to his own cryptocurrency wallets. Another MCC product, dubbed “Trading Bots,” operated under the same deception. Capuci said that the bots were “incredibly high frequency, susceptible of hundreds of trades per second,” and that investors should expect daily returns.
“Just like with the Mining Packages, meanwhile, Capuci allegedly executed an investment fraud scheme with the Trading Bots, not as he advertised, but instead shifting capital to himself and co-conspirators,” the DOJ stated in its indictment.
MCC looked to be set up like a pyramid scheme. To ensure financial, Capuci enlisted the help of affiliates and promoters. He guaranteed the promoters dozens of new expensive treats in exchange, including Apple watches, iPads, and high-end vehicles.
The issue is currently being studied by the FBI’s Miami Field Office. Capuci, of Port St. Lucie, Florida, has been charged with conspiracy to commit wire fraud, securities fraud, and international money laundering by the Department of Justice. The consequences are a maximum sentence of 45 years in jail if declared guilty.
Crypto blogger Peter Obi highlighted in a review of the cryptocurrency mining platform that the mixture of MCC’s $50 monthly membership charge and its steep 3% withdrawal fee meant that investors were unlikely to make a profit unless they were introduced to other investors. He called such a referral approach “particularly involving” because it was similar to previous crypto scams.
Regulators have charged a number of crypto leaders for running Ponzi schemes in recent years. The Department of Justice accused Bitconnect founder Satishkumar Kurjibhai Kumbhani earlier this year of allegedly operating a $2 billion Ponzi scheme, the world’s largest virtual currency pyramid scam.
Capuci’s company was never listed with the Securities and Exchange Commission. The company was issued a fraud alert by the government today. According to the SEC news release, Capuci and his accomplices encouraged 65,535 investors around the world to buy mining packages, offering daily profits of 1% paid weekly for over a year. The sale of mining packages brought in $8.1 million, while initiation fees brought in $3.2 million.