Mining Capital Coin found has been indicted for running a cryptocurrency multi-level marketing scam.
Founder and CEO of Mining Capital Coin (MCC), Luiz Capuci Jr., 44, of Port St. Lucie, Florida, has been indicted on federal charges of “purported cryptocurrency mining and investment platform,” according to the Department of Justice (DOJ). He allegedly carried out a $62 million worldwide fraud scheme.
“Cryptocurrency fraud undermines financial markets worldwide as bad actors defraud investors and it limits the ability of legitimate entrepreneurs to innovate within this emerging space,” said Assistant Attorney General Kenneth A. Polite, Jr. of the DOJ’s Criminal Division. “The department is committed to following the money – whether physical or digital – to expose criminal schemes, hold these fraudsters accountable, and protect investors.”
According to the indictment, Capuci Jr. and his co-conspirators misled individuals by convincing them to invest in MCC by purchasing “Mining Packages.” They told investors that MCC would produce sizeable profits and falsely guaranteed returns. Capuci used MCC’s own cryptocurrency, Capital Coin, as a separate organization that was “stabilized by revenue from the biggest cryptocurrency mining operation in the world.” In reality, investigators found Capuci operated a fraudulent investment scheme and “did not use investors’ funds to mine new cryptocurrency but instead diverted the funds to cryptocurrency wallets under his control.”
Capuci marketed MCC’s purported “Trading Bots” as an additional way to invest in cryptocurrency. He said MCC joined with “top software developers in Asia, Russia, and the U.S.A. to create an improved version of Trading Bot[s] that [were] tested with new technology never seen before.” He said “MCC’s Trading Bots operated in very high frequency, being able to do thousands of trades per second,” and “each of MCC’s Trading Bots would generate daily returns for investors.” All of these claims were false, and Capuci was not using MCC Trading Bots to generate income but was transferring the money to himself and his co-conspirators.
“This office is committed to protecting consumers from unscrupulous fraudsters seeking to capitalize on the relative novelty of digital currency,” said U.S. Attorney Juan Antonio Gonzalez for the Southern District of Florida. “As with any emerging market, those who invest in cryptocurrency must beware of profit-making opportunities that appear too good to be true.”
“Virtual currency markets are growing rapidly, and unfortunately so are cryptocurrency fraud scams,” said Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division. “The FBI and our law enforcement partners are committed to investigating financial fraud wherever it occurs, including in the virtual currency space.”
Capuci took promoters and affiliates under his wing and caused them to promote MCC and its investment programs through a multi-level marketing scheme (i.e., a pyramid scheme). He bribed them with elaborate gifts, including Apple watches and iPads as well as luxury vehicles such as a Lamborghini, Porsche, and his own Ferrari.
“This case should serve as a warning to any individuals who look to illegally capitalize on the perceived ambiguity of the emerging crypto market to take advantage of innocent investors” said HSI Miami Special Agent in Charge Anthony Salisbury. “HSI will continue to work with our partners to pursue anyone who utilizes these types of schemes to victimize would be customers.”
Capuci faces a maximum total sentence of 45 years behind bars.