Cryptocurrency

Latvian Individual Extradited for Securities Fraud and Wire Fraud in Cryptocurrency Scheme | USAO-EDNY

Earlier today, Ivars Auzins, a citizen of Latvia, was extradited to the United States on a six-count indictment charging him with wire fraud, securities fraud, and conspiracies to commit wire fraud and securities fraud in connection with the operation of eight companies that purported to offer, invest in or mine digital assets.  Auzins will be arraigned on the indictment tomorrow in federal court in Brooklyn before the Honorable Roanne L. Mann.

Breon Peace, United States Attorney for the Eastern District of New York, and Michael J. Driscoll, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI) announced the charges. 

“Auzins perpetrated a brazen scheme in which he fleeced investors who funneled millions of dollars into fraudulent cryptocurrency,” stated United States Attorney Peace.  “This Office will continue to vigorously investigate and prosecute those who lie and steal from investors, including those like the defendant who operate from abroad.”  Mr. Peace thanked the Securities and Exchange Commission, New York Regional Office, for their assistance during the investigation.

As alleged in the indictment, Auzins, using aliases to conceal his identity, operated a series of entities the “Auzins Entities” that advertised through email campaigns, social media and websites dedicated to cryptocurrencies.  The Auzins Entities purported to offer valuable investment opportunities, solicited investments and then effectively disappeared.  Some of the Auzins Entities – Denaro and Bitroad Limited – purported to raise funds from investors through initial coin offerings (ICOs).  Other Auzins Entities – Impressio Estate Ltd., Broi Investments Ltd., also known as Bankroi, ChangePro Pty Ltd., Gemneon Investments Limited and Lycovest Ltd. – purported to be cryptocurrency investment platforms that provided investors with different investment plans and profit rates.  Another Auzins Entity – Innovamine – purported to offer investments in mining a number of cryptocurrencies, including Bitcoin and Ether.

As alleged, Auzins and co-conspirators induced investors to invest in the Auzins Entities through a series of material misrepresentations and omissions about the products and services that the Auzins Entities claimed to provide, the profits that investors would earn by investing in the Auzins Entities and the individuals who operated the Auzins Entities.  For example, in its marketing materials, Denaro stated that its Chief Executive Officer, “Ron Ramsey,” previously was an executive at a technology company based in Ohio, its Chief Financial Officer, “Jeremy Boker,” obtained a degree from a university in Kentucky, and that it issued debit cards associated with a credit card company based in New York.  These representations were false.  After soliciting investors in its ICO, Denaro stopped its public advertising campaign, its website became publicly inaccessible, and its investors lost their investments.

Between approximately November 2017 and July 2019, individuals in the United States and elsewhere transferred at least $7 million in digital assets to the Auzins Entities.  Shortly after receiving these investments, the Auzins Entities disappeared without providing their promised services. 

The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.

The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorney John O. Enright is in charge of the prosecution with assistance from Paralegal Jordi Martinez. The Justice Department’s Office of International Affairs worked with law enforcement partners in Latvia to secure the arrest and extradition of Auzins to the United States, and the U.S. Marshals Service carried out the extradition.

The Defendant:

IVARS AUZINS (also known as “Aivars Grauzdins”)
Age:  29
Riga, Latvia

E.D.N.Y. Docket No. 21-CR-357 (ERK)

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