The United States’ Federal Trade Commission (FTC) has settled charges against four promoters of a crypto multi-level marketing (MLM) investment scheme.
According to an announcement made by the commission last week, all four promoters were ordered to pay restitution for their misdeeds and are barred from operating or participating in any other scheme of such nature.
The four promoters – Thomas Dluca, Eric Pinkston, Louis Gatto, and Scott Chandler – were promising huge returns to the investors for their investments in two schemes named Bitcoin Funding Team and My7Network.
They even promoted both the schemes heavily using websites advertisements, social media platforms, YouTube, and even conference calls. The schemes even promised a return of $80,000 in a month for investment as little as $100.
Similar to , the investors were also encouraged to recruit more participants in the investment scheme to receive lucrative rewards.
The watchdog agency also alleged that Chandler, in addition to both the MLM schemes, also promoted for Jetcoin and assured the investors a “fixed rate of return” for the investments.
Agencies’ quest against fraud schemes
The shady schemes last year, which prompted it to obtain a court order in March 2018 to stopped the marketing practices of the MLM scheme and froze the assets of the promoters.
The settlement ordered Dluca to pay $453,932 while the penalty for Chandler was set at $31,000. Though Pinkston was also ordered to pay $461,035, the penalty will be suspended upon payment of $29,491, due to his inability to pay the full amount. However, any latter revelation of any misrepresentation of the finances by him will force him to pay the full amount.
In addition to the penalty, all four promoters of the schemes are permanently prohibited from “operating, participating in, or assisting others in promoting or operating any multi-level marketing program, pyramid, Ponzi, or chain referral scheme.”
The commission approached the district court of the Southern District of Florida with the proposed order.
Earlier this month, the securities market watchdog in the US settled with illegal crypto investment scheme of PlexCoin in total by the promoters and the company.