In a court filing submitted to the U.S District Court of Utah, the SEC is moving to freeze the assets of three participants in a cryptocurrency scam (Daniel F. Putnam, Jean Paul Ramirez Rico, Angel A. Rodriguez of MMT Distribution, LLC, and R & D Global, LLC), who raised $12 million in running a multi-level marketing scheme. The Ponzi-like scheme run from July 2017 through November last year even if investors continued paying to the scheme till March 2020.

Modern Money Team (MMT), the Ponzi scheme, promised investors huge gains on their investments through the mining of cryptocurrencies on MMT managed mining hardware. The profits were then to be split to the investors each month. Investors from the U.S and all across the globe paid as little as $50 for a “two-year mining contract” or $2000 for a “lifetime mining contract”.

After raising $3.5 million from the “mining operations” from about 200 investors across the world, the defendants were unable to fulfill their weekly and monthly payouts at the end of November 2018 as the value of cryptocurrencies dropped sharply.

However, the top management of MMT used up a huge chunk of the users funds for personal gain. Putnam spent close to $150,000 on a condominium and spa the filing states.

In a fight to keep the scheme going on, MMT released a statement on pivoting their business to offer “cryptocurrency trading packages.” The filing reads,

“Investors could purchase packages ranging in price from $20 to $500 per package and in duration from one to two years. Half of the invested funds would be used to engage in trading activities, and the other half would be paid out as commissions to the MLM structure.”

Ramirez was in charge of the funds collected in the MLM claiming he invests the funds in a BitFinex account. In Nov 2019, the payments to investors stopped abruptly. MMT told investors BitFinex froze Ramirez’s account and stopped any trading on the account. Investors have not received any payments since. As a word of caution, be mindful of new emerging companies like Forsage as well.

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