DOJ and SEC expose charges in HyperFund crypto fraud

According to the DOJ’s officials, the three charged defendants falsely claimed that investors in HyperFund were set to receive substantial returns paid in cryptocurrency mining operations, which did not exist. The criminal case included Sam Lee, an Australian citizen residing in Dubai, who is accused of co-founding HyperFund, and two promoters, Rodney Burton from Miami, and Brenda Chunga from Severna Park, Maryland. The former is charged with a single count of conspiracy to commit securities fraud and wire fraud, while Burton is accused of one count of conspiracy to operate an unlicenced money-transmitting business and another count of operating an unlicenced money-transmitting business. Both individuals face a maximum potential sentence of five years in prison if convicted.

On the other hand, Chunga pled guilty to one count of conspiracy to commit securities fraud and wire fraud, for which the same possible maximum sentence applies. Separately, Chunga agreed to settle civil charges by the SEC for violating the anti-fraud and registration provisions of the US securities laws, with her being scheduled to be sentenced at the beginning of May 2024. The settlement includes the agreement to disgorge the money she made in the scheme and civil fines to be determined at a later date. The SEC complaint mentions that Chunga received more than USD 3.7 million from both the HyperFund platform and investors, as well as that she leveraged her earnings to fund personal expenses and help recruit others into the scheme by showing off the potential wealth to be earned through HyperFund. The SEC charged Lee with the same violations.

HyperFund was also known as HyperTech, HyperCapital, HyperVerse, and HyperNation. The DOJ’s court documents declare that from June 2020 to November 2022, Lee and his co-conspirators allegedly provided and sold investment contracts to the public through HyperFund’s online investment platform. The company’s promotional materials supposedly made several false claims, including that investors who purchased memberships were set to receive between 0.5% to 1% daily in passive rewards until it either doubled or tripled the investor’s initial funding.

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