The Commodity Futures Buying and selling Fee (CFTC) has filed a criticism in opposition to Michael Griffis and Amanda Griffis.
The criticism, submitted on the Tennessee Center District Court docket and seen by FX Information Group, alleges that starting in at the very least July 2022 and persevering with by way of at the very least the start of January 2023 (the “Related Interval”), the defendants, performing individually and in live performance with one another, engaged in a scheme by way of which they fraudulently solicited at the very least $6 million from over 100 people situated all through at the very least ten states throughout the nation, for the specific objective of pooling funds to commerce commodity futures contracts.
Styled as “Blessings Through Crypto” or “Blessings of God Through Crypto” by the defendants, the commodity pool purported to provide “buyers the chance to guess on the long run value of cryptocurrency” to “make as a lot revenue collectively” as potential.
Of their solicitations of potential pool members for the Blessings Pool, the Griffis made numerous misrepresentations and omitted materials info. These materials misrepresentations and omissions included, however usually are not restricted to: promising exaggerated income with none disclosure of potential threat and/or promising completely no threat of loss; misrepresenting how pool members’ funds had been to be dealt with and used; claiming that the Blessings Pool was “authorized” when it was not; and, failing to tell pool members that Blessings Pool funds could be misappropriated by Defendants and used as Defendants’ personal.
The criticism additional alleges that the defendants, performing individually and in live performance with one another, additional dedicated fraud whereas performing as unregistered commodity pool operators (CPO), by pooling pool members’ funds, by purporting to commerce these funds in futures however not partaking in a single commerce, by misappropriating pool participant funds, and by falsely refusing to honor quite a few pool participant requests to withdraw funds from the Blessings Pool.
The defendants additionally commingled the Blessings Pool funds with their private funds, and unrelated enterprise funds, throughout at the very least 19 completely different financial institution accounts at 5 monetary establishments and three digital asset exchanges, all with out pool members’ authorization or data.
The defendants used at the very least $1 million in pool participant funds for private expenditures, together with paying Defendants’ private money owed and buying quite a lot of shopper items.
Defendants paid out roughly $855,000 to a handful of pool members; the cash for these funds got here from the contributions of different pool members in Ponzi-style funds.
The remaining $4.1 million in pool funds had been by no means used to commerce “crypto futures” as promised by defendants, who as an alternative despatched the funds to nameless digital wallets managed by unknown third events. These funds at the moment are untraceable and sure unrecoverable for all reasonable functions, misplaced to pool members.
Apart from the Ponzi funds made to a choose few pool members, all different pool members who despatched their cash to Defendants misplaced their total contributions to the Blessings Pool.
By soliciting pool participant funds for the aim of buying and selling in commodity pursuits (together with futures), accepting pool participant funds, and pooling all pool participant funds for the acknowledged objective of buying and promoting commodity pursuits, Defendants operated a commodity pool. Moreover, by working a commodity pool Defendants functioned as CPOs, and did so with out being registered with the Fee.
The Fee seeks civil financial penalties and remedial ancillary aid, together with restitution to defrauded pool members, pre- and post-judgment curiosity, and such different equitable aid because the Court docket might deem essential and acceptable.