OmegaPro founder and promoter charged in $650M crypto fraud, part of a transnational scheme promising 300% returns and requiring payment in cryptocurrency. The defendants – Michael Shannon Sims and Juan Carlos Reynoso – acted in a fairly typical manner, showcasing a luxurious lifestyle on social media, participating in public events, and making false statements about licensing and investment safety.
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OmegaPro Crypto Fraud – an Unfortunate Classic
Just recently, we reviewed interim statistics on crypto security incidents and especially the role of crypto fraud. Well, it seems the numbers will shift significantly within a week, given the latest $650M incident. The key participants were Michael Shannon Sims (48, Georgia and Florida) and Juan Carlos Reynoso (57, New Jersey and Florida), who acted as organizers and promoters of OmegaPro.
To be more precise, it all started with Sims, who founded OmegaPro in 2019, and Reynoso joined in April of the same year. They positioned the project as an investment platform based on the multi-level marketing (MLM) scheme, where investors were offered to purchase “investment packages” with a promised return of up to 300% over 16 months.
The investigation alleges that Sims misled victims by promoting the performance of OmegaPro’s traders and the safety of the investments. Reynoso, in turn, stated that the company operated under a legitimate license or, at times, that it was not subject to any country’s legal jurisdiction.
Throughout this period, Sims and Reynoso behaved in a completely typical manner – in addition to promoting performance and making false claims about licensing, they actively maintained social media accounts. These were filled with displays of a wealthy and successful lifestyle, luxury items such as cars, jewelry, and so on.
All of this created the appearance of legitimacy and success, and allowed the platform to attract over $650 million in cryptocurrency. The funds were sent to wallets controlled by OmegaPro executives and promoters and then redistributed to obscure the origin of the assets.
And then, unexpectedly, the platform began to have problems. After announcing a “network hack” in January 2023, Reynoso told investors that their funds would be transferred to a related platform called Broker Group. Despite these statements, users were unable to withdraw funds either from their OmegaPro accounts or from the new platform.
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What Are the Legal Consequences for OmegaPro
The investigation is being led by the FBI, IRS Criminal Investigation, and HSI New York, with the involvement of specialized HSI divisions in Bangkok, Bogotá, Frankfurt, London, Miami, New Delhi, Istanbul, and The Hague. The Attorney General’s Office of Colombia and the Joint Chiefs of Global Tax Enforcement (J5), which includes the tax authorities of Australia, Canada, the Netherlands, the United Kingdom, and the United States, are also participating. The U.S. Attorney’s Office for the District of Puerto Rico is handling the case in cooperation with the Justice Department’s Fraud Section and CCIPS.
Both defendants, according to the indictment, personally profited in multimillion-dollar amounts. They are charged with conspiracy to commit wire fraud and conspiracy to commit money laundering, which carry penalties of up to 20 years in prison.
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Conclusion
Any crypto fraud is a crime from a legal perspective and is ethically reprehensible, but some cases are worse than others. As can be seen from the size of the fraud and the jurisdictions and agencies that have taken on the case, these individuals crossed a serious line and angered far too many.
It is worth watching the progress and outcome of the investigation closely. And of course, always be cautious and attentive, get information only from authorized sources, and don’t get involved in unverified projects.
Stay tuned for the latest updates and opportunities in crypto, blockchain, and DeFi.
