(NewsNation) — Three people were charged for their alleged roles in orchestrating a $1.89 billion cryptocurrency fraud scheme by the Department of Justice Monday.
Two of the individuals were charged with defrauding investors, while one of the three pleaded guilty to the charges, the DOJ said in a press release.
Xue (Sam) Lee, 35; Rodney Burton, 54; and Brenda Chunga43, were all charged in an indictment unsealed Monday for their involvement in the company Hyperfund — also known as HyperTech, HyperCapital, HyperVerse and HyperNation.
Lee, an Australian citizen residing in Dubai, United Arab Emirates, has been accused of allegedly co-founding the company. Burton, of Miami, and Chunga, of Severna Park, Maryland, were allegedly promoters of Hyperfund, the DOJ said.
“The defendants are charged with defrauding investors to the tune of $1.89 billion. As alleged in court documents, the defendants falsely represented that investors would receive substantial returns paid from cryptocurrency mining operations, which did not in fact exist,” Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division said.
Between June 2020 and November 2022, Lee, Burton and Chunga allegedly “offered and sold investment contracts to the public through HyperFund’s online investment platform,” according to court documents. When it was obvious to investors that the company could not disburse payments, Hyperfund started blocking its investors’ withdrawals, the DOJ said.
“The level of alleged fraud here is staggering,” U.S. Attorney Erek L. Barron for the District of Maryland said.
Lee faces five years in prison if found guilty of conspiracy to commit securities fraud and wire fraud. Burton, who is charged by criminal complaint, faces one count of conspiracy to operate an unlicensed money-transmitting business and one count of operating an unlicensed money-transmitting business. He could receive up to five years in prison for each count.
Chunga was the individual who pleaded guilty to the charge of conspiracy to commit securities fraud and wire fraud against her, and faces up to five years in prison. She will be sentenced by a federal court judge.