Central Islip, NY – On July 23, 2018, Dillon Michael Dean of Longmont, Colorado, was ordered by a New York federal court to pay over $1.9 million in penalties and restitution for a fraudulent scheme involving Bitcoin. The judgment, filed on July 9, 2018, also applies to Dean’s UK-registered company, The Entrepreneurs Headquarters Limited (TEH).
Judge Sandra J. Feuerstein of the U.S. District Court for the Eastern District of New York found that Dean and TEH engaged in a fraudulent scheme from approximately April 2017 through January 2018, soliciting at least $499,264.04 worth of Bitcoin from at least 127 members of the public. They falsely represented that the funds would be pooled and invested in binary options, then misappropriated the money.
According to the court, Dean and TEH failed to register with the Commodity Futures Trading Commission (CFTC) as a Commodity Pool Operator and Associated Person, as required by law. They solicited investments through websites, YouTube videos, and Facebook posts, falsely claiming trading expertise and high rates of return. The defendants never actually traded on behalf of their customers, and any reported profits were fictitious.
At least 120 customers suffered total losses of at least $432,184.79 as a result of the fraud. The court ordered Dean and TEH, jointly and severally, to pay $432,184.79 in restitution and a $1,497,792.12 civil monetary penalty. Additionally, they were permanently banned from trading and registering with the CFTC, and enjoined from further violations of the Commodity Exchange Act and CFTC Regulations.
The CFTC cautions that victims may not recover all lost funds, as the defendants may lack sufficient assets. The agency stated it will continue to pursue accountability for those who harm customers in the commodity markets.
Source: CFTC.gov
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