Arlington, Texas – The Commodity Futures Trading Commission (CFTC) has filed charges against Morgan Hunt and Kim Hecroft, alleging a fraudulent scheme targeting the public with false promises of Bitcoin investment returns. The complaint, filed in the U.S. District Court for the Northern District of Texas, details how Hunt, operating as Diamonds Trading Investment House, and Hecroft, operating as First Options Trading, allegedly defrauded at least two customers between January 2017 and September 2018.
According to the CFTC, Hunt and Hecroft solicited Bitcoin from investors with misleading claims about trading products, including forex, binary options, and diamonds. They purportedly misrepresented their trading experience, track record, and the profitability of customer investments, providing fabricated account statements to bolster their false claims.
The scheme escalated with the defendants forging official-looking documents, including a doctored CFTC memorandum. This forgery falsely stated that investors were required to pay a “tax” to the CFTC before withdrawing funds from their Bitcoin accounts – a claim the CFTC emphatically denies. Hecroft allegedly used these forged documents, bearing the CFTC’s official seal, to induce a customer into transferring additional Bitcoin under the guise of paying this fabricated tax. This act may constitute a federal crime under 18 U.S.C. § 506 and/or 18 U.S.C. § 1017.
“Increased public awareness of the CFTC’s involvement in policing the virtual currency markets has, unfortunately, provided new opportunities for bad actors,” stated James McDonald, CFTC Director of Enforcement. “The CFTC is on guard against fraudsters who try to take advantage of the CFTC’s reputation in order to cheat customers, and will take swift action against such misconduct.”
The CFTC alleges that the defendants misappropriated customer funds for their own unauthorized use, rather than investing them as promised. The agency seeks to prevent further fraudulent solicitations and is pursuing penalties against Hunt and Hecroft. The specific amount of restitution and penalties sought were not immediately disclosed in the release.
Source: CFTC.gov
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