The regulator has obtained an asset freeze in a case targeting two cryptocurrency-related schemes and the individuals behind them.
The United States Securities and Exchange Commission (SEC) continues to take action against fraudulent schemes related to digital assets. On Friday, the regulator announced that it has obtained an asset freeze and other emergency relief against Daniel F. Putnam, Jean Paul Ramirez Rico, and Angel A. Rodriguez, who allegedly defrauded investors of over $12 million in two cryptocurrency-related schemes.
According to the SEC’s complaint, unsealed on June 5, 2020, in federal court in Salt Lake City, since at least July 2017, Putnam operated a multilevel marketing business known as “Modern Money Team” and sold interests in a purported cryptocurrency mining operation to nearly two hundred investors. The complaint further alleges that Putnam misappropriated some of these investor funds and spent them on personal expenses.
The complaint alleges that Putnam, Ramirez, and Rodriguez, then raised additional funds by offering so-called “cryptocurrency trading packages” to investors with the potential for high returns. In reality, as alleged, the defendants misappropriated investor funds for personal use and to make Ponzi-like distributions to earlier investors. According to the complaint, the defendants conducted these fraudulent schemes through two Utah companies controlled by Putnam, MMT Distributions, LLC and R & D Global, LLC.
The SEC’s complaint charges Putnam, Ramirez, Rodriguez, MMT Distribution, and R & D Global with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The complaint further charges Putnam, Ramirez, and MMT Distribution with violating the registration provisions of Sections 5(a) and 5(c) of the Securities Act, and names Putnam’s father, Richard T. Putnam, as a relief defendant.
In this action, the SEC seeks permanent injunctions, disgorgement of ill-gotten gains with prejudgment interest, and civil penalties.