Dillon Michael Dean of Longmont, Colorado, and his company, The Entrepreneurs Headquarters Limited, are facing charges of fraud following a civil enforcement action filed by the Commodity Futures Trading Commission (CFTC) in the U.S. District Court for the Eastern District of New York. The complaint alleges a scheme to defraud the public out of Bitcoin through a Ponzi-style investment operation.
According to the CFTC, Dean and his UK-registered company solicited at least $1.1 million in Bitcoin from over 600 individuals between approximately April 2017 and January 2018. The defendants purportedly promised to convert the Bitcoin into traditional currency to invest in commodity interests, specifically binary options, on a CFTC-designated exchange. They allegedly made false claims about their trading expertise and guaranteed high rates of return to attract investors.
However, the CFTC alleges that instead of investing the funds as promised, Dean misappropriated the Bitcoin, using it to pay earlier investors – a classic hallmark of a Ponzi scheme. The complaint details that the defendants used websites, YouTube videos, and Facebook posts to promote their fraudulent venture, falsely claiming successful trading and substantial profits.
James McDonald, the CFTC’s Director of Enforcement, stated the case highlights the growing risks associated with virtual currencies and the agency’s commitment to pursuing those who exploit public interest for fraudulent gain. “Defendants sought to take advantage of that public interest, offering retail customers the chance to use Bitcoin to invest in binary options, when in reality they were only buying into a Ponzi scheme,” McDonald said.
The CFTC’s complaint further alleges that after misappropriating over $1 million in customer funds, Dean launched a similar scheme under the name Real Trade Profits, continuing to solicit Bitcoin deposits with promises of high returns. The agency is seeking restitution for defrauded investors, disgorgement of any ill-gotten gains, and civil penalties. The litigation is ongoing.
Source: CFTC.gov
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