The following are summaries of administrative actions the Texas State Securities Board took from April 1 through June 30, 2018:
Estrada Trucking, Capital Cash, Financial Freedom Club, Mark J. Moncher, 911MoneyStore Inc., and Frank Dalotto: Emergency Cease and Desist
Texas Securities Commissioner Travis J. Iles on April 5 entered an Emergency Cease and Desist Order against a convicted felon who is offering investments in a cryptocurrency trading program and a marijuana growing operation.
According to the order, the Enforcement Division of the State Securities Board found sufficient evidence that the felon, Mark J. Moncher, is offering investments in an unregistered cryptocurrency trading program that purportedly delivers returns of 8% per week. Moncher published an online advertisement targeting Texas residents, who were directed to a website containing information about both offerings.
The order alleges that Moncher, who controls Financial Freedom Club Inc., is concealing from investors his December 2009 conviction on charges of mail and wire fraud in U.S. District Court in Orlando, Fla. Financial Freedom Club lists an address in Orlando.
Moncher and his company are offering for sale investments in a cryptocurrency trading program together with 911MoneyStore Inc., which has two offices listed in New York state. Frank Dalotto is the principal of 911MoneyStore.
Dalotto is not disclosing the name of the trader he is using or the strategy used to generate 8% weekly returns. The order alleges that Dalotto is telling potential investors that to avoid securities laws, he and 911MoneyStore “really don’t want to portray this as an investment in crypto” and will refer to the profit payments as a “commission.”
Financial Freedom Club and Moncher – along with Capital Cash, a company claiming to operate out of New York and Chicago – are also selling unregistered promissory notes in a marijuana growing operation in California.
The notes are supposedly being issued by Estrada Trucking Inc., based in Palmdale, Calif., and its CEO, Caleb Estrada Vasquez.
The Enforcement Division alleges that Financial Freedom Club and Capital Cash are soliciting Texans to invest in Estrada-issued promissory notes. Capital Cash is promising “100% guaranteed” returns from the sale of marijuana to legal dispensaries of marijuana.
Bitcoin Trading & Cloud Mining Ltd.: Emergency Cease and Desist
Texas Securities Commissioner Travis J. Iles entered an Emergency Cease and Desist Order on May 8 against Bitcoin Trading & Cloud Mining Ltd. also known as BTCRUSH.
BTCRUSH, whose principals list an address in London, is soliciting Texas investors with the promise of huge returns from the mining of cryptocurrencies at three massive computing centers featured in videos on the company's website. According to the order, however, BTCRUSH created the videos by manipulating stock footage available for sale on the internet.
BTCRUSH doesn’t disclose the locations of the sites but describes one as “a secluded place in the mountains hiding incredible computing power.” Another site is purportedly located in a bombproof shelter from “the Second World War times.”
BTCRUSH describes itself as a cloud-based cryptocurrency mining company that mines both Bitcoin and other virtual currencies, known as alt-coins. The company is offering investments in a program it says will sell newly created alt-coins to buy bitcoins, an established currency. Unlike traditional bitcoin mining, cloud-based mining doesn’t require a user to own any computer hardware or have any technical expertise. Instead, vast numbers of computer "mining rigs" are housed in a facility owned by the company, and investors purchase contracts that entitle them to a share of the virtual currency that is created through mining.
BTCRUSH claims an investment in its mining investment program has been paying 4.1% interest daily on a lifetime contract since going live on March 8, 2018. According to the order, that means a $10,000 investment would return $410 per day and $149,650 over one year.
Forex EA & Bitcoin Investment LLC: Emergency Cease and Desist
Texas Securities Commissioner Travis J. Iles on May 8 entered an Emergency Cease and Desist Order against Forex EA & Bitcoin Investment, a company promising investors that its cryptocurrency trading program can turn an investment of $5,000 investment will return $50,000 in 21 days.
The company is intentionally failing to disclose its trading strategy and the widespread risk in trading bitcoin and foreign currencies.
Returns are guaranteed, the company says, by a fund of $500,000 “and climbing” that will make up any losses. The company, however, is providing no material information about the fund.
The order names James Butcher and Richard Dunn, who have a last known address in New York City and claim Forex EA & Bitcoin is a limited liability company with a place of business in New York. New York State’s Division of Corporations has no filings related to Forex EA & Bitcoin.
Forex EA is misleading potential Texas investors by providing a contract that purports to be governed by and construed in accordance with Texas law.
Forex EA & Bitcoin Investment is directing Texans to contact the company at a number with a 281 area code, which covers the region in and around Houston.
Wnd Wide Coin Inc., Charles Roman, Fred Andrew, and John Anny: Emergency Cease and Desist
Texas Securities Commissioner Travis J. Iles entered an Emergency Cease and Desist Order on May 15 to stop Wind Wide Coin Inc., an entity that says it is based in Houston, from fraudulently offering investments in a cryptocurrency trading program.
The order alleges that Wind Wide Coin and three sales agents in Houston are offering for sale investments in a cryptocurrency trading program that uses an “automatic trading bot.” The company is promising investors the combination of “no risk” and extraordinarily high returns. The purchase of 0.10 of bitcoin, for example, will return 1 bitcoin 24 hours later, a one-day return of 900%.
Wind Wide Coin’s marketing uses false celebrity and political endorsements. The company’s website has featured a photograph of Jennifer Anniston, but identified her as “Kate Jennifer,” an investor. Similarly, a photograph of Prince Charles was identified as “Mark Robert,” another investor who provided a testimonial. The testimonial was then attributed verbatim to a “Johnson Smith,” supposedly a U.K. investor.
Wind Wide Coin represents that its Houston office is in an office building at 5015 Mitchelldale, 77082. There is no building of any kind at that location.
Wind Wide Coin is misleading potential investors by claiming it is a “licensed company” and “legally registered.” Neither the company nor the sales agents named in the order are registered to sell securities in Texas.