The federal Commodities Figure Trading Commission (CFTC) filed civil charges against an Ohio man and his three companies, alleging he perpetuated a digital asset trading scam much like a “Ponzi scheme” that bilked would-be investors of at least $12 million.
In addition to bringing charges against Rathnakishore Giri, SR Private Equity and NBD Eidetic, the government also named Giri’s parents as “relief defendants” in a bid to obtain assets they allegedly were holding.
Via a charging document filed in U.S. District Court for the Southern District of Ohio, the government alleges Giri solicited more than $12 million and at least 10 bitcoin from 150 individuals, “offering to trade digital assets on their behalf.”
Among the misrepresentations Giri allegedly made in the pursuit of investments are the following: he was an experienced digital asset trader accustomed to generating returns 5-to-10 percent a month; profits were guaranteed; customers could not lose their original investments and customers could withdraw investments and profits at any time.
In reality, the government alleged, Giri commingled customers’ funds with his own. Moreover, the government alleged, “misappropriated customer funds to pay purported profits to other customers in a manner akin to a Ponzi scheme.” The government stated he “never established any digital asset trading account in the name of any investment fund.”
As for the customers’ money, the government alleged he used his customers’ funds to pay for his “lavish lifestyle, which included yacht rentals, luxury vacations and luxury shopping.”
CFTC Commissioner Kristin Johnson said in a prepared statement coinciding with the filing of the civil charges: “Recent attraction to digital assets and cryptocurrency market firms proclaiming high yields or promising instant wealth, but obscuring deceptive schemes that borrow from long-prohibited behavior is deeply concerning. While there are many benefits to responsible innovation, customers must remain vigilant.”
A summons issued Friday (Aug. 12) in federal gave Rathnakishore Giri 21 days to respond to the suit.