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SEC
Disrupts $300 Crypto Pyramid Scheme
August 2, 2022
The Securities and Exchange Commission charged 11 individuals for their
roles in creating and promoting Forsage, a fraudulent crypto pyramid and
Ponzi scheme that raised more than $300 million from millions of retail
investors worldwide, including in the United States. Those charged
include the four founders of Forsage, who were last known to be living
in Russia, the Republic of Georgia, and Indonesia, as well as three
U.S.-based promoters engaged by the founders to endorse Forsage on its
website and social media platforms, and several members of the so-called
Crypto Crusaders—the largest promotional group for the scheme that
operated in the United States from at least five different states.
According to the SEC’s complaint, in January 2020, Vladimir Okhotnikov,
Jane Doe a/k/a Lola Ferrari, Mikhail Sergeev, and Sergey Maslakov
launched Forsage.io, a website that allowed millions of retail investors
to enter into transactions via smart contracts that operated on the
Ethereum, Tron, and Binance blockchains. However, Forsage allegedly has
operated as a pyramid scheme for more than two years, in which investors
earned profits by recruiting others into the scheme. Forsage also
allegedly used assets from new investors to pay earlier investors in a
typical Ponzi structure.
Despite cease-and-desist actions against Forsage for operating as a
fraud in September 2020 by the Securities and Exchange Commission of the
Philippines and in March 2021 by the Montana Commissioner of Securities
and Insurance, the defendants allegedly continued to promote the scheme
while denying the claims in several YouTube videos and by other means.
"As the complaint alleges, Forsage is a fraudulent pyramid scheme
launched on a massive scale and aggressively marketed to investors,"
said Carolyn Welshhans, Acting Chief of the SEC’s Crypto Assets and
Cyber Unit. "Fraudsters cannot circumvent the federal securities laws by
focusing their schemes on smart contracts and blockchains."
 In
addition to charging the four founders, the complaint, filed in United
States District Court in the Northern District of Illinois, also charges
Cheri Beth Bowen, of Pelahatchie, Miss., Ronald R. Deering, of Coeur d’
Alene, Idaho, Samuel D. Ellis, of Louisville, Ky., Mark F. Hamlin, of
Henrico, Va., Carlos L. Martinez, of Chicago, Ill., Alisha R. Shepperd,
of Dunedin, Fla., and Sarah L. Theissen, of Hartford, Wis., with
violating the registration and anti-fraud provisions of the federal
securities laws. The SEC’s complaint seeks injunctive relief,
disgorgement, and civil penalties.
Without admitting or denying the allegations, two of the defendants,
Ellis and Theissen, agreed to settle the charges and to be permanently
enjoined from future violations of the charged provisions and certain
other activity. Additionally, Ellis agreed to pay disgorgement and civil
penalties, and Theissen will be required to pay disgorgement and civil
penalties as determined by the court. Both settlements are subject to
court approval.
The SEC’s investigation was conducted by Liz Canizares and Pamela
Sawhney of the Crypto Assets and Cyber Unit and supervised by Amy
Friedman and Ms. Welshhans. The litigation is being conducted by Patrick
Costello, Christopher Carney, Ms. Canizares, and Ms. Sawhney and
supervised by Olivia Choe. The Commission appreciates the assistance of
the Securities and Exchange Commission of the Philippines and the
Montana Commissioner of Securities and Insurance.
Foreign Defendants Last known residence
Vladimir Okhotnikov Tbilisi, Republic of Georgia
Jane Doe a/k/a Lola Ferrari Bali, Indonesia
Mikail Sergeev Moscow, Russia
Sergey Maslakov Moscow, Russia |
