A U.S. DIstrict Court grand jury in Austin on Dec. 17 indicted Ekeoma Jerry Onyeukwu, a resident of Nigeria who spoofed the Texas State Securities Board website to make it appear individuals who lost money in the worldwide BitConnect cryptocurrency fraud were eligible for partial refunds.
The grand jury indictment charges Onyeukwu with counts of wire fraud. According to the indictment, Onyeukwu in November 2018 set up a fraudulent notice online that claimed to be from the Texas State Securities Board. The notice informed people that they can receive refunds of up to 35% of their investment in Bitconnect, a cryptocurrency company based in England, if theyt completed a refund form and submitted a $350 "consent fee."
Onyeukwu allegedly estabnlished ficticious websites with names similar to the Texas State Securities Board, including "ssb.texas.us" and "ssb-tesax.us." According to the indictment, the sites were set up to falsely claim that the State Securities Board controlled BitConnect and issue partial refunds to BitConnect investors.
Texas Securities Commissioner Travis J. Iles warned the public about the spoofing scam in an Investor Alert on Nov. 30, 2018. Iles warned investors that the false webpage is trying to defraud investors in an “advance fee” scam, in which individuals are asked to pay a fee up front before they receive any proceeds.
The Securities Commissioner issued an Emergency Cease and Desist Order against BitConnect on Jan. 4, 2018. The Order, which later become final, did not provide for the payment of restitution to BitConnect investors.