SALT LAKE CITY – Every day since the KSL Investigators first reported the fraud allegations levied by Utah authorities on the cryptocurrency investment group, BG Wealth Sharing, Ltd., we’ve received emails and voicemails from desperate people from around the world — worried that their money is gone.
Details of the cease-and-desist
Now, the Utah Division of Securities has filed an emergency cease-and-desist order against BG Wealth and its owners, saying they present a “grave, continuous threat of irreparable financial ruin.”
The order alleges a “large-scale, international cryptocurrency multi-level marketing (“MLM”) Ponzi and advance-fee fraudulent scheme targeting Utah residents.” It says investors were given “fraudulent guarantees of compounding daily returns.” The order also says dashboards shown to investors reflected “artificial numbers” with “no trace of real trading activity.”
Allegations of withdrawal fee fraud
The state also alleges that when investors tried to withdraw their money, they were told by BG Wealth that they would have to pay more money, “under the fraudulent pretense of a ‘tax audit’ fee and an ‘account verification required to unlock withdrawals.’” Those who paid those fees still didn't get their money, the cease-and-desist order says.
Utah issues cease-and-desist orders against BG Wealth as human trafficking allegations surface. (Matt Gephardt, KSL)
Description of the marketing event
Last week, we spoke to victims who talked about BG Wealth’s sales pitch including a big event held in Sandy in April. It included giveaways, dinner, dancing, testimonials, a ribbon cutting to an office in West Jordan, and a room filled with hundreds of people who believed they were investing in cryptocurrency.
“You felt like you were a part of something big,” an attendee told us. “I mean, why would you not?”
Human trafficking allegations
Now, the Utah Division of Securities is warning about something even darker. In an online post that named BG Wealth Sharing, regulators stated global scams are often run through scam centers in Southeast Asia, where people may be trafficked, held against their will and forced to conduct fraud.
In the post, regulators said engaging with the scheme does not just pose risks to your wallet.
“By engaging with random individuals online who promote BG Wealth, investors are inadvertently fueling an industry that relies on forced labor and violence to maintain its profit margins,” warned the post.
Response to cease-and-desist
The KSL Investigators have tried diligently to reach BG Wealth and the man who has identified himself to the state’s Commerce Department as a local organizer and manager, Richard Chea. We have not heard back, but he did respond to the cease-and-desist order.
In an email to enforcement officers with the Securities Division, Chea wrote that “without admitting wrongdoing … the referenced activity has been discontinued” and that he and his wife “intend to comply moving forward.”
Potential legal consequences and recovery
Robert Cummings, director of the Utah Division of Securities, said the violations alleged by his division could be punishable as a third-degree felony.
“Is this the kind of thing where people go to jail?” I asked him.
“When we look at referring a case, we look at the number of victims, the amount of money stolen and the overall harm to society,” Cummings answered.
“Is anybody going to get any money back?” I asked.
“I can't say what's going to happen in the future,” he responded. “I can say that the Feds, when they initial initially started this investigation, they did seize a lot of money and freeze assets. We'll be trying to recoup money from the bad actors and getting restitution to the victims, if at all possible.”
Protecting yourself
If you have invested money into BG Wealth Sharing, the advice is to stop sending money. Cummings warns that paying anything to unlock your account will not result in you recovering any money.
Watch out for recovery scams: Criminals often try to defraud victims of one scam by offering to recover lost money for a fee in a new scam.
And report it now to the Utah Division of Securities, the FBI and the SEC.
Utah Division of Securities – https://forms.gle/BT5D8FyCideCEBkV6
FBI Internet Crime Complaint Center – https://www.ic3.gov/
U.S. Securities and Exchange Commission – https://www.sec.gov/submit-tip-or-complaint
