The US seizes $24 million worth of crypto for Brazilian probe
The US Department of Justice announced that the money was seized from a scheme that had defrauded Brazilians of over $200 million
The US Department of Justice (DOJ) revealed that it had seized around $24 million in cryptocurrencies from a scheme that had defrauded thousands of Brazilians of over $200 million.
The statement indicated that the US was in charge of seizing the assets after an official request that was submitted by the government of Brazil. The seizure order was made under the treaty between the United States of America and the Federative Republic of Brazil on Mutual Legal Assistance in Criminal Matters. Brazil had submitted a request for assistance in connection with a large cryptocurrency fraud scheme in a Brazilian federal police investigation called “Operation Egypto.”
“Brazilian authorities estimate that more than $200 million was obtained through this scheme through which more than tens of thousands of Brazilians may have been defrauded”, the statement explained.
Several individuals have been charged by the Brazilian federal prosecutors in this case.
The Brazilian court issued a seizure order that directed the seizure of virtual currency in the US that was owned or controlled by a Brazilian native, Marcos Antonio Fagundes, and the seizures made by the US were tied to his alleged role in the scheme. According to information that was given by Brazilian authorities, Fagundes is charged with several criminal violations of Brazilian law. This includes the operation of a financial institution without legal authorisation, misappropriation, money laundering, fraudulent management of a financial institution and securities law violations.
Documents that were filed during the Brazilian criminal proceeding and the Brazilian court’s findings show that between August 2017 to May 2019, Fagundes and other defendants solicited funds from prospective investors over the internet. This was achieved through a variety of other means, such as over the telephone, and the funds received were held in a manner that subjects it to regulation as a financial institution under Brazilian law. Fagundes and the other defendants failed to comply with these legal requirements.
The defendants allegedly solicited investors for the purpose of funding corporations that they controlled, in the form of Brazilian currency or cryptocurrency, and the companies would then invest the funds collected in several types of virtual currencies. However, the Brazilian court found that only a minute amount of funds were invested in cryptocurrencies as promised and very little was returned to the original investors.
The conspirators were also accused of making false and inconsistent promises to investors about the way that the funds were invested.