The U.S. Department of Justice (DOJ) and the U.S. Securities and Exchange Commission (SEC) have announced charges Xue Lee, age 35, an Australian residing in Dubai, alongside two promoters, Rodney Burton, 54, of Miami, and Brenda Chunga, 43, of Severna Park, for their role in the crypto MLM scheme HyperFund.
Background of the Case
HyperFund, also known as HyperTech, HyperCapital, HyperVerse, and HyperNation, is at the center of these allegations. From June 2020 to November 2022, Xue Lee and co-conspirators reportedly sold investment contracts through HyperFund’s online platform, making various false claims.
They promised investors daily passive rewards of 0.5% to 1%, purporting to double or triple the initial investments. HyperFund claimed these payments would partially come from extensive crypto-mining operations, which, as it turned out, did not exist. By July 2021, the scheme allegedly began blocking investor withdrawals.
In its complaint, the SEC asserts that HyperFund was a pyramid scheme, relying solely on investor funds with no actual revenue sources. This led to its collapse in 2022, trapping investors’ funds.
Charges and Legal Proceedings
Xue Lee and Brenda Chunga are accused of violating anti-fraud and registration provisions of federal securities laws. While Lee remains at large since fleeing to Dubai, Chunga has consented to settle the charges. Her settlement includes permanent injunctions against future violations and specific activities in multi-level marketing or crypto asset offerings, in addition to financial penalties yet to be determined.
If convicted, Lee faces up to five years in federal prison for conspiracy to commit securities fraud and wire fraud. His current location and status are unknown.
Rodney Burton faces charges of conspiracy to operate and operating an unlicensed money-transmitting business. He has been arrested and detained, with a potential five-year prison term for each count if convicted.
Brenda Chunga, known as “Bitcoin Beautee,” pleaded guilty to conspiracy to commit securities fraud and wire fraud. Chunga admitted to receiving at least $3 million from her involvement in the scheme and is required to pay full restitution of the victims’ losses, agreed to be at least $3 million. She faces a maximum of five years in prison.
Report Financial Wrongdoing
FinCrime Observer encourages anyone with information related to this case to come forward and share details to aid in further investigation and potential investor protection.
