The U.S. Securities and Exchange Commission (SEC) is moving to freeze the assets of a linked cryptocurrency mining and multilevel marketing system, which have claimed $ 12 million in investments.
Who are the characters and businesses involved
The complaint concerns Utah-based Daniel F. Putnam, his MMT Distributions and R & D Global businesses, and partners Angel A. Rodriguez of Utah and Jean Paul Ramirez Rico of Colombia. The SEC said the three lied to investors and illegally appropriated their funds.
The "Modern Money Team" (MMT), the name with which Putnam refers to both companies, has invested in cryptocurrency equipment since at least July 2017 and has ultimately focused on offering Investors "Cryptocurrency trading packages" that would take advantage of the "arbitrage" opportunities of cryptocurrencies on Bitfinex, according to the complaint that was filed with the United States District Court for the Utah district.
The reconstruction of the facts according to the SEC complaint
Ramirez managed the investments in cryptocurrencies, Rodriguez was the link and Putnam, a veteran of multilevel marketing, managed MMT. Two hundred investors joined Putnam's mining program and MMT collectively raised $ 12 million from 2.000 investors in total, according to the SEC.
The Commission also said that MMT stopped paying investors in November 2019, but continued to raise funds until 9 March 2020. The complaint reads that part of the money raised has never been used for the cryptocurrency business or the investment in digital assets.
Rather, Putnam spent over $ 100.000 of its investors' funds on a condominium and $ 33.000 on the purchase of a spa, according to the SEC. Ramirez controlled the Bitfinex account, which Putnam had recently declared to investors in January 2020 to hold 260 bitcoins, according to the complaint.
But the SEC claimed that the account never held more than 50 bitcoins and that it was closed in May 2019. Ramirez also periodically made payments from ponzi scheme to investors, the SEC complaint said.
The SEC also claimed that Putnam and Rodriguez knew "or were reckless in not knowing" that Ramirez was running a ponzi scheme via the Whatsapp chat.
In an intercepted chat in February 2019, Putnam wrote to Rodriguez "Either we will retire or go to prison this year," says the SEC. "And I'm not [sic] yet sure that any of this is real." He added.
