The US Securities and Exchange Commission (SEC) is accusing two brothers based in Pittsburgh, Pennsylvania of running a fraudulent crypto investment scheme and stealing millions of dollars in the process.
A complaint filed by the SEC alleges that Sean and Shane Hvizdzak lied to investors by claiming their money would be invested in a fund that had essentially doubled in value in the third and fourth quarters of last year.
“On or around March 13, 2020, Shane sent Investment Adviser A an investor ‘pitch’ presentation, which, among other things, claimed that, for the third and fourth quarters of 2019, the Fund had 100.77 percent and 92.90 percent gains, respectively. These representations were false.”
According to the SEC, the fund’s performance was actually in the negative, and the brothers repeatedly took amounts far in excess of the 1.5% management fee from their clients, directing tens of millions of dollars to their personal banking accounts.
A judge granted a request to freeze assets associated with the fund on June 16th, and a hearing on the matter is scheduled for June 30th.
Co-chief of the SEC’s asset management unit, Adam S. Aderton, says the alleged fraud shows why investors should always be skeptical and do their own due diligence.
“As alleged in our complaint, the Hvizdzaks touted exceptional, but false, performance to potential investors when offering their fund. Investors should be skeptical of claims that seem too good to be true.”