Judge Torres Hands Down 30-Month Sentence in Crypto Ponzi Scheme

Judge Analisa Torres, who made waves in the crypto industry with her landmark ruling on XRP, has once again drawn attention. This time, she sentenced a crypto Ponzi scheme promoter to 30 months in prison for defrauding investors of $8.4 million. The sentencing comes just days after the SEC filed an appeal challenging Torres' earlier ruling that distinguished between institutional and retail sales of XRP.

In her 2024 ruling, Torres established that certain tokens are not inherently securities when sold to retail investors on exchanges. Now, another key case is on the line, with political drama surrounding the sentencing of Maria Hernandez, the promoter of a fraudulent crypto trading and mining operation called Forcount.

During the sentencing, Judge Torres described how Hernandez sold valueless coins and pointed to evidence suggesting her continued involvement in similar schemes. Hernandez pleaded guilty to conspiracy to commit wire fraud charges in July 2023, following charges initially filed by the SEC in 2022.

Hernandez worked with co-conspirators between 2017 and 2021 to promote Forcount's fraudulent operations, promising investors they would double their investments within six months through guaranteed returns. When confronted, Hernandez reportedly directed disappointed investors toward other fraudulent opportunities.

The sentencing shed light on the schemes' impact on victims, with one investor telling the court they lost their retirement savings and marriage due to the fraud. Victims also reported feeling particularly vulnerable due to their immigration status.

The sentence was delivered amid leadership changes at the Southern District of New York, following the departure of U.S. Attorney Damian Williams in December. Williams led the prosecution in high-profile cases, including the imprisonment of disgraced FTX founder Sam Bankman-Fried and Ghislaine Maxwell, Jeffrey Epstein's accomplice. Former SEC Chair Jay Clayton has been nominated as Williams' replacement, signaling a potential shift in the office's approach to crypto-related crime prosecution.

The Forcount case has resulted in multiple related convictions, with senior promoter Juan Tacuri receiving a 20-year sentence in October 2024. The scheme's founder, Francisley Da Silva, remains in custody in Brazil.