A Texas regulator on Thursday ordered the closure of a trading operation linking cryptocurrency and medical marijuana and offering an eight percent weekly return. Ironically, the company Financial Freedom Club, also known as Millionaire Mentor University, is run by convicted felon Mark Moncher.
Texas Securities Commissioner Travis J. Iles accused Moncher and his firm of trying to sell unregistered cryptocurrency securities to Texas residents. Moncher even published an online advertisement on his website containing information about both offerings.
“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 representing that he is working with ‘a trader with excellent results,’ but he is not disclosing the name of the trader 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.’”
The website claims the company has sufficient resources to provide investors financial independence for 30, 60, 90 to 120 days as it would invest in cryptocurrencies which in turn will be loaned to growers of medical marijuana in California. The scheme recalls earlier promises of fast earnings, but with propositions such as cloud mining. Crypto loans are often a coverup for a pyramid, or Ponzi schemes.
The website advertises, “Never work hard again.”
According to the Board, Moncher’s digital currency trading scheme is also encouraging investors to commit felony offenses by hiding the true source of their $2,000 investment in the trading program.
Investors in the scheme were told they would receive an "invoice for a product matching your initial payment for your protection," if the “investment goes bad.”
That product is supposed to be a gold Seiko watch which the investments “will never get,” the Board further stated.
The Board ordered Moncher to pay $1.9 million in restitution from his victims after pleading guilty to commit wire and mail fraud.
Texas keeping crypto frauds at bay
The state of Texas has strong resolve to weed up unscrupulous players in the digital currency market and ordered the closure of DavorCoin in February on suspicion it is operating a scam.
The Board issued a CDO against DVO and ordered the firm to stop selling marketing its company with statements that are “materially misleading or otherwise likely to deceive the public” and barred it from selling unregistered securities in the state.