The SEC has filed a lawsuit against Georgia Brothers in the amount of $60 million for operating a crypto-ponzi scheme
The SEC alleges that the brothers defrauded investors by utilizing a fabricated crypto program to guarantee high returns, while simultaneously spending millions on luxury items.
The U.S. Securities and Exchange Commission (SEC) has filed accusations against two brothers for operating a $60 million Ponzi scheme.
In Atlanta, the United States District Court for the Northern District of Georgia received the complaint on August 26.
Jonathan Adam and his sibling Tanner Adam defrauded over 80 individuals by fraudulently claiming to operate a crypto program that guaranteed a monthly return of 13.5% to those who invested in it, according to the regulator’s filing.
The two individuals deceived investors by asserting that their algorithm could identify arbitrage opportunities across various platforms between January 2023 and June 2024. They pledged that investor funds would be allocated to a lending pool for the purpose of financing flash loans and executing transactions. Assets would be borrowed and returned within a single blockchain transaction.
However, Justin Jeffries, the Associate Director of Enforcement at the SEC’s Atlanta Regional Office, stated that the bot was wholly fabricated. The siblings allegedly squandered $53.9 million of the $61.5 million they raised, rather than engaging in trading. They provided financial support for opulent lifestyles, such as the acquisition of luxurious cars and the construction of a $30 million condominium.
The regulator asserts that the Adams brothers assured system users that the risk was “essentially non-existent,” assuming a global market collapse. Furthermore, Jonathan is purportedly responsible for misleading his supporters by concealing his background, which includes three prior convictions for securities fraud.
The SEC implemented emergency asset sanctions for the companies of the brothers, GCZ Global LLC and Triten Financial Group LLC, in order to halt the scheme.
The agency has subsequently charged both Jonathan and Tanner with violating the anti-fraud provisions of federal securities laws. They are seeking the recovery of all investor funds, permanent injunctions against their companies, and civil penalties.
Jonathan used the Fifth Amendment in response to a subpoena for testimony issued by the financial monitor during its investigation. This is particularly noteworthy. In the interim, Tanner failed to submit any documents or provide himself for testimony in response to the agency’s subpoena.
The volume of cryptocurrency transactions directed to addresses associated with scams decreased by $1.5 billion in 2023, an 11% decrease from $13.9 billion in 2022 to $12.5 billion. Pyramid schemes and Ponzi schemes continued to be the most prevalent fraud subcategories that year.
