Law enforcement authorities from the U.S. and Brazil seized $24 million in cryptocurrency that was procured via online fraud. According to the Department of Justice (DoJ), federal authorities from both the countries participated in “Operation Egypto,” a Brazilian ongoing federal investigation into the suspected fraud scam. Brazilian authorities estimate that attackers have obtained more than $200 million through this scheme, defrauding tens of thousands of Brazilians.
According to the DoJ, fraudsters lured investors with innovative investment opportunities advertised online and in-person claiming to offer high returns in cryptocurrencies. The Brazilian court found that the defenders invested little amounts in cryptocurrencies and returned very little to the investors.
The U.S. seizures were tied to Brazilian Marcos Antonio Fagundes’ alleged role in the scheme. He has also been charged with several criminal violations of Brazilian law, including fraudulent management of a financial institution, misappropriation, and money laundering, and securities law violations.
“To carry out the scheme, the conspirators are alleged to have made false and inconsistent promises to investors about the way the funds were invested and exaggerated the rates of return. From August 2017 to May 2019, Fagundes and other defendants solicited funds from prospective investors over the internet, sometimes in combination with telephone and other means, and held the funds received in a manner that subjected it to regulation as a financial institution under Brazilian law, with which Fagundes and the other defendants failed to comply,” DoJ said.
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