The U.S. Department of Justice (DoJ) has indicted Las Vegas resident Bryan Lee on fraud-related charges for his role in a fraud scheme that cost investors losses of over $45 million.
Prosecutors disclosed that Lee promoted CoinDeal as an investment mechanism offering clients “extremely high returns.” Banking on his word, authorities estimated that more than 10,000 individuals sunk in funds in the scheme, which was a fraudulent operation.
In 2021, Lee and his accomplices told investors that Coindeal was creating its own digital asset designed to be the default currency of its metaverse. Investors were told that a consortium of wealthy buyers had been lined up, poised to send the value of investments to new highs.
Contrary to Lee’s claims, there was no proprietary metaverse or digital currency in development. Court documents claim that Lee received over $45 million from investors, which he splurged on luxury automobiles and real estate.
Prosecutors are charging Lee with multiple counts of wire fraud, mail fraud, conspiracy, and “three counts of engaging in monetary transactions in criminally derived property.” Lee faces up to 100 years in federal prison if found guilty of the charges along with Michael Glaspie, an accomplice scheduled for sentencing on June 16 after pleading guilty to wire fraud.
The U.S. Securities and Exchange Commission (SEC) was on Lee’s trail in January after charging CoinDeal for offering unregistered securities to the public and violating the antifraud provisions. The SEC’s case seeks to recover investors’ funds, pre-judgment interest, and permanent bans on defendants from engaging in securities, among others.
“As alleged in our complaint, in reality this was all just an elaborate scheme where the defendants enriched themselves while defrauding tens of thousands of retail investors,” Daniel Gregus, Director of the SEC’s Chicago Regional Office, said.
A multi-pronged regulatory approach
Law enforcement agencies in the U.S. rely on a multi-pronged approach to crack down on digital asset fraud, touting interagency collaboration as a veritable solution. The SEC and the DoJ have pledged to work in concert, with both bodies opting to bolster the digital currency investigations unit.
The DoJ created its National Cryptocurrency Enforcement Team (NCET) designed to “serve as the focal point for the department’s efforts to tackle the growth of crime involving these technologies.” In 2022, the SEC doubled the size of its Crypto Assets and Cyber Unit to 50 as it increased the intensity of its enforcement actions against bad actors.
Watch: BSV Provides Solutions for Cybersecurity & Fraud
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