SEC terminated fraudulent investment fund

The Securities and Exchange Commission (SEC) stopped another fraud and misappropriation of fundsHvizdzak Brothers Cryptocurrency Fund Investors

The commission received a temporary restraining orderand the decision to freeze the assets of two brothers and the three companies that they control in order to “stop fraud and misappropriation of investor funds”.

According to the SEC, from July 2019 to May 2020,Sean and Shane Hvizdzak were offering securities from their private fund, which purportedly invested in digital assets. The SEC alleges that the two misrepresented the fund's performance by fabricating financial statements and falsifying audit documents. 

Khvizzaki convinced investors that the fundmade a profit of 100.77% and 92.90% on his cryptocurrency investments in the last quarters of 2019. In reality, the crypto fund actually lost all funds in the reporting period.

In addition, the SEC claims that the brothers redirected the investments received by the fund to personal bank and cryptocurrency accounts for their own benefit.

The SEC indictment notes:

In general, since the defendants began to receivemoney for the Fund in July 2019, the amount from third parties amounted to 31 million dollars. Since July 1, 2019, Defendants transferred almost $ 26 million from the Fund's account to their personal accounts, or more than 80 percent of the funds received from investors.

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