The US Justice Department (DoJ) has indicted Mining Capital Coin (MCC) CEO Luiz Capuci Jr for what it alleges to be a $62m fraud scheme.
According to the DoJ, Capuci may have used the cryptocurrency mining and investment platform he is chief executive of to facilitate his unlawful activities.
He sold “mining packages” to investors and said that they would generate substantial returns based on new cryptocurrencies developed as part of a new international network of miners and mining.
According to the DoJ, some 65,000 investors have been made such promises since January 2018.
However, much of the money Capuci collected was diverted in the end. The money was used to meet Capuci’s increasingly lavish lifestyle which included real estate, luxury destinations and holidays.
Commenting on the case, assistant attorney general Kenneth A Polite, Jr, part of the DoJ’s Criminal Division, explained that crypto criminals have grown bolder and that many people are taking advantage of investors lack of experience to fleece them out of money.
Polite added: “Cryptocurrency-based fraud undermines financial markets worldwide as bad actors defraud investors and limits the ability of legitimate entrepreneurs to innovate within this emerging space.”
Capuci is also involved with advertising a dedicated cryptocurrency allegedly developed by MCC, Capital Coin.
The coin has turned out to be a dud according to DoJ documents and investigators who have taken a closer look into Capuci’s assets and alleged investment opportunities.
Ultimately, the DoJ has described the entire scheme as a “pyramid scheme” and has called into question the validity of any of the promises Capuci has made.