Ladies and gentlemen, we have a new episode of “When Greed Meets the Law.” The US federal court, in a stunning twist worthy of a sitcom, has ordered the Brazilian founders of EmpiresX, an illegal cryptocurrency investment platform, to pay over $130 million in penalties and restitution. The Commodity Futures Trading Commission (CFTC) announced this grand finale like a dramatic telenovela.
On Feb. 4, Judge Cecilia Altonaga of the US District Court for the Southern District of Florida, with a flourish worthy of a Broadway villain, imposed permanent injunctions, financial penalties, and other legal actions against EmpiresX founders Emerson Pires and Flavio Goncalves, along with their sidekick, Joshua Nicholas.
The case, which started as a plot for a modern-day Wolf of Wall Street, was originally filed on June 30, 2022. The defendants, with the subtlety of a cat caught with the canary, failed to respond to the accusations by the deadline, leading to a default judgment. Classic move.
Promise of Unrealistic Return on Investments (Because Who Needs Real Returns?)
According to the court documents, Empires Consulting operated a fraudulent investment scheme, EmpiresX, which falsely promised high returns to investors. Pires and Goncalves were charged with obtaining at least $40 million from victims through false crypto advertisements. Because who needs transparency when you can just make up numbers, right?
Instead of investing the funds as promised, the founders misused them to purchase Bitcoin (BTC), Ether (ETH), and USDt (USDT), while restricting withdrawals and displaying fake profits from non-existent investments. It’s like they were playing a video game, but the stakes were real people’s savings.
The EmpireX founders used the funds for personal expenses, including luxury purchases and travel. Because why buy a small yacht when you can buy a medium-sized island, am I right? Still, investigators recovered about $22.8 million in digital currencies from them. 🌴🌞
The court found the EmpiresX executives guilty of multiple violations, including fraudulent misrepresentation and deception, failure to register with the CFTC, misappropriation of funds, and violation of trading and regulations. It’s like they read the list of “How Not to Run a Business” and decided to check every box.
While Nicholas was arrested and pleaded guilty to conspiracy to commit securities fraud on Sept. 8, 2022, the founding duo reportedly fled to Brazil after learning about the CFTC charges. Because when in doubt, run to the nearest beach. 🏃♂️💨
In July 2022, the US Department of Justice filed a notice to transfer the EmpiresX founders to fugitive status. However, Brazilian law prohibits the extradition of its citizens, making their arrest and extradition to the US unlikely. So, they’re basically on a permanent tropical vacation, all thanks to your investments. 🌴🍹
CFTC Secures Hefty Fines and Perma Ban on Trading (Because Sometimes, Karma Is a Dish Best Served Cold)
The founders were jointly fined $32.1 million for disgorgement and $96.5 million as a civil monetary penalty. Nicholas was fined $289,000 and $867,000, respectively, for the same offenses. Because when you play with fire, you get a fine that could buy a small country. 🌐💰
In addition to the financial penalties exceeding $130 million, the CFTC secured a court order banning the defendants from trading in US financial markets. It’s like they’ve been given a timeout, but instead of a corner, it’s the entire financial market.
On Feb. 5, CFTC acting chair Caroline Pham announced that the agency would be winding down its practice of regulation by enforcement during the Trump administration. Because, you know, sometimes you need a fresh start. 🌱
Still, enforcement director Brian Young revealed a forthcoming task force realignment will help “uphold public confidence in the integrity of our markets.” It’s like saying, “We’ve got this, folks. Trust us, we’re the good guys now.” 🦸♂️;
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2025-02-06 11:49