- Two men charged in $650M OmegaPro crypto fraud scheme
- Scam promised 300% returns through crypto investment packages
- Lavish events and luxury displays used to lure investors
The US federal prosecutors have accused two men of running a $650 million crypto-based Ponzi scheme using the OmegaPro and promising the investors unrealistic returns.
Authorities charged Michael Shannon Sims, 48, and Juan Carlos Reynoso, 57, with running and selling the scam, which has spread worldwide since 2019 and initially defrauded thousands.
Fraudulent Scheme Promised 300% Returns Through Crypto Packages
The Department of Justice (DOJ) revealed that OmegaPro was a multilevel marketing platform through which the company sold crypto-based investment packages to investors.
Sims, the promoter and founder, and Reynoso, the Latin America and the US operations chief, lied and said that returns would be 300 percent within 16 months. They ensured that the cash was to be managed by the elite foreign exchange traders, and the participants were lured into investing in cryptocurrency.
DOJ officials indicated that the defendants exploited vulnerable individuals by promising them that their money was safe and assuring them of high returns. The structure of the program was in such a manner that it resembled a genuine investment but in fact it was a pyramid-based fraud.
Lavish Marketing and Deceptive Tactics to Attract Investors
The defendant had created an image of a rich individual to attract and convince investors. They organized glamorous marketing parties across the globe and, in one instance, hosted a massive event in Dubai where they projected the OmegaPro brand logo on Burj Khalifa, the tallest building in the world.
Social media promoted luxury cars, costly vacations, and designer goods to create the image of legitimacy and success.In January 2023, OmegaPro claimed that hackers had attacked their network and stated that they moved the money to another site, Broker Group.
Unfortunately, investors couldn’t cash out on either platform. The prosecutors claim that the money was laundered with the help of cryptocurrency wallets owned by the insiders, which deprived the investors of their money.
Legal Charges and Potential Penalties
Sims and Reynoso face the charge of conspiracy to commit wire fraud as well as conspiracy to launder money. On each count, the maximum jail sentence is 20 years. A federal court in Puerto Rico is prosecuting the case and has unsealed the indictment.
The case is one of the bigger crackdowns on cryptocurrency fraud and the multi-level marketing scams that utilize digital assets. It highlights the risks investors will face from fraudulent crypto-investment programs that promise unrealistic gains.
Related Cases and Industry Impact
A Turkish court detained OmegaPro co-founder Andreas Szakacs in July 2024 on charges related to the company’s alleged $4 billion fraud, a charge that Szakacs rejected.
The Omegapro case brings to the fore the modern challenge that regulators and authorities are facing in combating global crypto fraud. It is a reminder to investors of the dangers of great returns on products in unregulated digital asset markets.
