Two Charged in $650 Million Crypto Fraud Scheme

The Department of Justice has charged two individuals, Michael Shannon Sims and Juan Carlos Reynoso, in connection with a massive crypto investment scheme that allegedly defrauded investors out of more than $650 million. The indictment, unsealed in a federal court in Puerto Rico, accuses the pair of operating and promoting OmegaPro, a multilevel marketing venture that promised outsized returns and misled participants worldwide.

According to the Department of Justice, Sims served as a founder and strategic consultant for OmegaPro, while Reynoso allegedly led the company's operations in Latin America. Prosecutors claim that between 2019 and 2023, the duo targeted vulnerable individuals both in the United States and abroad by selling so-called “investment packages” that were to be purchased using cryptocurrency. These packages were marketed with the promise of generating returns of up to 300% in just 16 months, supposedly through the efforts of elite foreign exchange traders.

The scheme was aggressively promoted through high-profile marketing tactics, including extravagant promotional events, public displays like projecting OmegaPro’s logo onto Dubai’s Burj Khalifa, and social media posts showcasing luxury lifestyles, exotic vacations, designer items, and expensive cars. These tactics were designed to create an illusion of legitimacy and success, luring in thousands of investors who believed they were buying into a safe and highly profitable venture.

In January 2023, OmegaPro announced that it had experienced a network hack, assuring clients that their funds were safe and being transferred to another platform known as Broker Group. However, prosecutors allege that investors were ultimately unable to withdraw their money from either OmegaPro or Broker Group. Instead, the funds were allegedly laundered through various cryptocurrency wallets and funneled to insiders.

Both Sims and Reynoso face charges of wire fraud conspiracy and money laundering conspiracy, with each charge carrying a maximum sentence of 20 years in prison. Separately, OmegaPro co-founder Andreas Szakacs was arrested in Turkey in July 2024 for allegedly scamming investors out of $4 billion through the same firm.

This case highlights the growing concern over deceptive schemes in the cryptocurrency industry, where flashy marketing and false promises can lure unsuspecting investors into fraudulent ventures. The charges against Sims and Reynoso underscore the need for vigilance and due diligence when investing in cryptocurrency-related opportunities.