Forcount founder Francisley Valdevino Da Silva (aka Francis Silva), has been sued by the SEC.

The SEC has also filed civil fraud charges against three US-based promoters.

Francis Da Silva (right), refers to himself as the “Cryptocurrency Sheik” and “boss of the pyramid scammers”.

Da Silva, a Brazilian national, is the founder of Forcount and other MLM crypto Ponzis.

Presumably upon learning he was under investigation, Da Silva fled the US for Brazil in January 2022.

As part of an investigation into an $800 million Ponzi empire, Da Silva was arrested by Brazilian authorities on November 3rd.

Juan Antonio Tacuri Fajardo is a top Forcount promoter and resident of Florida. Fajardo was arrested by US authorities on December 14th, 2022.

Both Da Silva and Tacuri have been indicted in parallel criminal charges pertaining to Forcount.

Ramon Antonio Perez Arias and Jose Ramiro Coronado Reyes dodged criminal charges, but have been sued by the SEC as top Forcount promoters.

Both Perez and Reyes are residents of Florida and shared a top Forcount investor account.

In their December 14th filed complaint, the SEC identifies Forcount as “a fake crypto asset trading and mining company.”

Forcount claimed that investments through Forcount would result in returns from “daily trade through our calibrated robots to generate daily earns!”

Forcount also claimed investors would receive returns from Forcount’s use of “intelligent mining system” with “10,000 machines” that “automatically mine” such crypto assets.

Despite Defendants promises of returns based on Forcount’s trading and mining, as well as the referral program, Forcount had no real source of revenue other than funds received from investors.

Forcount’s website displayed fictitious returns based on the specified amounts and types of crypto assets that investors appeared to hold in their Forcount accounts.

Defendants had no basis for the promised returns, and funds received from later investors were used to make Ponzi-type payments to
earlier investors.

This confirms BehindMLM’s Forcount review, published in May 2018.

In addition to being a Ponzi scheme, the MLM side of Forcount operated as a pyramid scheme.

Forcount did not sell any real product or service to retail customers during the relevant time period, and had no apparent source of revenue other than funds received from investors.

Defendants aggressively pushed investors to participate in the referral program and to solicit family and friends to invest.

Defendants promised investors that they would earn more from the referral program than they did from their membership “returns.”

Although not covered in our review, Da Silva hid his involvement in Forcount through a Boris CEO.

“Salvador Molina” was played by Spanish actor Nestor Nunez.

The SEC cites Nunez as an older, more mature looking actor who lived in Spain”.

Despite being presented as Forcount’s CEO, Molina “had no control over Forcount, and no relevant crypto asset expertise”.

In line with having a Boris CEO, Da Silva incorporated Forcount as a Panamanian shell company.

Supposed Forcount offices in Brazil were, as one investor who travelled there described, “were dressed up to look like Forcount’s office but were fake.”

Forcount began to collapse in mid 2019. This prompted a reboot a Weltsys and Mindex shitcoin exit-scam.

Da Silva exercised complete control over compensation for the referral program. It changed frequently at Da Silva’s direction—with varying levels, bonuses, and prizes.

On multiple occasions, Da Silva blocked promoters from earning additional points or took away points, and switched the crypto assets that points were purportedly earning.

Da Silva also regularly changed the payment structure, making it unpredictable.

All in all Forcount took in over $8.4 million. Like every MLM Ponzi scheme, the majority of invested funds was misappropriated by Da Silva and promoters, who spent it on “homes, dozens of cars, and luxury goods”.

Forcount marketing videos showcased Da Silva’s ill-gotten assets in Brazil and Florida.

Da Silva took videos showcasing his extravagant spending and assets during this time period, including, all in Brazil: two private jets, two helicopters, dozens of luxury vehicles, and a seaside mansion with a heliport, as well as, in Florida, another mansion.

In one video from May 2019, (Da Silva) sarcastically “thanked” Forcount investors — who had been told Forcount would contribute some portion of its profits to a charity — for contributing to a “charitable fund” that had allowed him to buy a Lamborghini.

At Forcount marketing events, additional luxury cars were rented and used to lure new investors in.

At various events held in 2018, Tacuri, Perez, and Coronado each showed off borrowed, leased, or rented cars that they falsely claimed to have purchased with investment proceeds generated from their memberships, including from the referral program.

At the direction of Coronado and Perez, one of their Forcount downline was instructed to lie about how much they were making each month.

In or around mid-2018, Coronado and Perez asked one downline promoter (“Promoter 1”) to provide a testimonial at an in-person event, and directed her to state she was making upwards of $20,000 per month.

From then on, Promoter 1 gave testimonials approximately every other month, and Coronado and Perez regularly introduced her as making over $20,000 per month. Coronado and Perez knew these statements about Promoter 1 were false.

Also, in late 2018, Coronado took a video of Promoter 1’s home, and showed this video at promotional events, claiming that Promoter 1 had been able to purchase it with her Forcount compensation.

Coronado knew that Promoter 1 did not own the property and was renting the house and that these statements were false.

Ticketed raffles at Forcount events were also rigged;

At a promotional event in Cancun, Mexico, in or around October 2019, Da Silva sold raffle tickets for a car.

When Da Silva was unable to sell enough raffle tickets, he decided to draw a fictitious number so that he could keep the proceeds.

“Promoter-1” isn’t named but is believed to have cooperated with the SEC as part of their investigation. At one point Perez disclosed to Promoter-1 that Forcount was in fact a Ponzi scheme.

By the end of 2019, Promoter 1 noted to Da Silva, Tacuri, and Perez that Promoter 1 was receiving many complaints from their downline investors who were unable to make withdrawals.

Perez told Promoter 1 to take new investors to an upcoming Forcount event planned for January 2020.

Perez said that with the money raised from new investors, Da Silva could pay the earlier investors.

Through offering passive returns to investors…

When promoting Forcount memberships, promoters, including Perez, Tacuri, and Coronado, told investors that they could expect their investment to double in six to eight months.

Tacuri’s “rules” for investing in Forcount (were) “create a free account, invest, invite friends, double up, and repeat the process.”

…Forcount’s investment opportunity constituted a securities offering.

The Forcount memberships were investment contracts and therefore securities, because investors made an investment of money in a common enterprise with a reasonable expectation of profits from the efforts of Defendants or third parties.

Defendants offered and sold these securities without registering their offers or sales with the Commission or qualifying for an exemption from registration.

Neither Forcount, Da Silva or any of Forcount’s promoters were registered with the SEC.

As such the Forcount defendants have been charged with securities fraud violations of the Securities and Exchange Act across three counts.

Of the ~$8.4 million Forcount took in

  • Francisley Valdevino Da Silva is alleged to have misappropriated $4.9 million;
  • Juan Antonio Tacuri Fajardo is alleged to have misappropriated $1.3 million; and
  • Ramon Antonio Perez Arias and Jose Ramiro Coronado Reyes are alleged to have misappropriated $1 million, which they split equally.

I can’t speak to Perez but after Forcount and Weltsys, Jose Coronado continued to defraud consumers through MLM crypto Ponzi schemes.

In April 2021 BehindMLM inadvertently tied Jose Coronado to the BNB Profit Ponzi scheme.

Coronado re-partnered up with Juan Tacuri to continue defrauding consumers through the OmegaPro Ponzi scheme.

The SEC is seeking a permanent injunction against the Forcount defendants, as well as disgorgement of ill-gotten gains and a civil monetary penalty.

While the SEC’s litigation against Forcount’s top promoter’s seems straightforward, how the case against Da Silva will progress is unclear.

Da Silva is believed to be in custody in Brazil. He is accused of defrauding Brazilians out of at least $800 million through various cryptocurrency schemes.

Despite being indicted in the US on related criminal charges, Da Silva being a Brazilian national means he won’t be extradited.

 

Update 3rd March 2023 – Following an intervention filing by the DOJ, the SEC’s civil Forcount case has been stayed pending the outcome of parallel criminal proceedings.

The stay order was made on February 22nd. The same order allows the SEC to continue to attempt service on Da Silva and Fajardo.

Fajardo is in custody in the US so service should be straightforward. Da Silva is believed to still be in custody in Brazil following his arrest last November.

 

Update 2nd September 2023 – In an August 3rd filing the SEC advised the court it had effected service on Juan Tacuri Fajardo.

The SEC also revealed that, back in February 2023, it applied to Brazilian authorities to execute service on Francis Da Silva through the Hague Convention.

As of August 3rd, the SEC hasn’t heard anything back. The regulator’s next Status Letter is due on December 8th.

 

Update 3rd November 2023 – The SEC confirmed service on Francisley Da Silva on October 26th.

As per a supporting affidavit, Da Silva was served on May 23rd, 2023.

 

Update 11th June 2024 – Juan Tacuri has pled guilty to conspiracy to commit wire fraud.