Were You a Victim of an Alleged Ponzi Scheme Involving Chicago Latinos? Feds Want to Hear From You

NBC 5 and Telemundo Chicago have found new information about CryptoFX, which allegedly convinced more than 40,000 people to invest more than $300 million into crypto currency in return for high profits. Now nearly all of that money has disappeared, including potential millions invested by people in Chicago's Latino community.

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They were told they could become millionaires by investing in crypto currency. But now, hundreds of Chicago-area Latinos appear to have lost their life savings in an alleged Ponzi scheme, and it's not at all clear if they'll ever get their money back.

That's the gist of the latest filing in a federal lawsuit against CryptoFX, which the U.S. Securities and Exchange Commission says took more than $300 million from more than 40,000 investors over a two-year period.  CryptoFX and its CEO, Mauricio Chavez, are based in Houston but also solicited members of Latino communities in California, Florida, Louisiana and here in Chicago.

The court case, filed in September of 2022, alleges that Chavez and his partner Giorgio Benvenuto spent the previous two years “targeting the Latino community” to raise millions of dollars from people who were led to believe that their money would be invested in digital currency.

Often, according to the case, CryptoFX used Chicago-area sales agents to get local Latinos to not just invest their own money, but also to encourage friends, relatives and others to invest as well.

If you invested money in CryptoFX -- or know someone who has -- the court-appointed receiver urges you to go to his website at cryptofxreceiver.com, contact his office by email at receivership@shb.com or call his offices at 713-546-5653.

The suit says “the vast majority of investor funds …. went to purposes unrelated to crypto asset investments, including real estate … personal spending, and to make Ponzi payments.” The S.E.C suit says Chavez and his company took in money from “unsophisticated investors” and led them to believe they could earn a “90% [profit] in [just] six months.” But instead of investing that money, the S.E.C says Chavez and Benvenuto turned around and paid most of it out to early investors, who were often close friends or members of their families. Those were the “Ponzi” payments.

The government alleges that Chavez and Benvenuto also spent investors’ money on themselves, for homes, cars, credit cards, luxury retailers, a hotel residence, travel, restaurants, jewelry, adult entertainment and a hair salon.

In the six months since the federal suit was filed, local Latino investors have appealed to their aldermen and other elected officials, staged demonstrations, and contacted the administrator in the S.E.C. case -- the court-appointed receiver -- who seized control of CryptoFX and has been trying, since then, to track down the hundreds of millions of dollars that flowed through the company.

So far, however, local investors have been met with few answers.

The problem, the receiver says, is that almost all transactions with CryptoFX were made in cash and the company kept few -- if any -- records on where all that cash went. The receiver also says that Chavez has refused to turn over his own records and is not cooperating with the receiver's requests. 

Chavez, according to the court case, may have pocketed more than $41 million of the investments, though Chavez himself denies this and challenges the notion that he is not cooperating fully in the case.

Meanwhile, NBC 5 and Telemundo Chicago have found scores of reports filed with the Chicago Police Department by local residents who say CryptoFX took their individual investments ranging from $5,000 to more than $100,000, though it is not clear (and CPD won't say) if police have launched investigations into all of these cases. In many of the reports received by NBC 5 and Telemundo Chicago, victims are told to contact the S.E.C. or the court receiver.

To date, however, the receiver says he has only been able to trace about $9.4 million in funds, much of that poured into luxury cars and property. Tracking down the remaining $291 million involves "a massive investigation," the receiver says in his latest filing, and "is going to require significant resources to unravel the claims of the estate."

And, he adds, "a complete tracing of investments may not be possible."

The receiver also says his office has heard from approximately 3,500 investors so far, and he wants to hear from as many more as possible. 

If you invested in CryptoFX -- or know someone who has -- the receiver urges you to go to his website at cryptofxreceiver.com; contact his office by email at receivership@shb.com, or call his offices at 713-546-5653.

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