The United States Department of Justice (DOJ) has indicted Luiz Capuci Jr., the CEO and co-founder of Mining Capital Coin (MCC), for allegedly running a $62 million fraud scheme.
Mining Capital Coin CEO Allegedly Misled Investors
According to the DOJ, Capuci and other unnamed members of his team had misled investors into thinking that MCC’s mining and investment program had massive profit-bearing potential.
Capuci claimed the firm has an international network of large-scale mining machines that could generate enormous profits and guaranteed returns if investors’ purchased the so-called “Mining Packages.”
The investment would allegedly be used to mine a new cryptocurrency, MCC’s native token dubbed “Capital Coin.” Capuci claimed the token was backed by the “biggest cryptocurrency mining operation in the world.” He, however, failed on these promises and rather resorted to using the funds raised by investors to fund personal crypto wallets under his control.
The DOJ said: “As alleged in the indictment, however, Capuci operated a fraudulent investment scheme and did not use investors’ funds to mine the new cryptocurrency, as promised, but instead diverted the funds to cryptocurrency wallets under his control.”
Running MLM Scheme
In addition to fraudulent mining packages and token sales, Capuci allegedly marketed dubious MCC trading bots to unsuspecting investors. He claimed that these bots utilized “new technology never seen before” to conduct thousands of trades and yield enormous returns daily.
The Justice Department further alleged that Capuci operated MCC as a multi-level marketing (MLM) scheme, recruiting affiliates and promoters to lure other investors. They were promised a wide range of rewards, from “Apple watches and iPads to luxury vehicles such as a Lamborghini, Porsche, and even Capuci’s personal Ferrari.”
Up to 45 Years in Prison
Capuci is currently charged with conspiracy to commit wire fraud, conspiracy to commit securities fraud, and conspiracy to commit international money laundering. If found guilty of all these charges, Capuci faces a maximum penalty of 45 years in prison.
Commenting on the latest indictment, Anthony Salisbury, Special Agent in Charge for HSI Miami, said, “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.”
Meanwhile, this is not the first time the US Justice Department has indicted a founding member of a fraudulent crypto scheme. Last month, CryptoPotato reported that the DOJ charged the owner of Block Bits Fund for misleading investors into committing nearly $1 million to a fake arbitrage autotrader.