HyperFund co-founder Sam Lee and promoters Rodney Burton and Brenda Chunga have been indicted.

Lee, aka Xue Lee and Samuel Lee, has been charged with conspiracy to commit securities fraud and wire fraud.

Burton has been charged with conspiracy to operate an unlicensed money transmitting business and operating an unlicensed money transmitting business.

Chunga, who has already pled guilty, has been charged with conspiracy to commit both securities and wire fraud.

As per the DOJ, HyperFund was a $1.89 billion dollar cryptocurrency fraud scheme. This tracks with BehindMLM’s HyperFund review, which identified a Ponzi scheme in 2021.

Lee and his co-conspirators allegedly offered and sold investment contracts to the public through HyperFund’s online investment platform.

To convince investors that HyperFund could make such payments, HyperFund allegedly claimed that its payments would be disbursed in part from its revenues from large-scale crypto mining operations, when in truth, HyperFund did not have such operations.

Beginning in at least July 2021, HyperFund allegedly began to block investor withdrawals.

BehindMLM documented HyperFund disabling withdrawals in December 2021.

The unsealed HyperFund indictments follow Burton’s arrest in Florida earlier this month.

Having pled guilty, Chunga is believed to have also been arrested. Lee remains at large hiding in Dubai.

The HyperFund indictments follow a joint investigation by the DOJ, Homeland Security and IRS.

Speaking on the HyperFund indictments, U.S. Attorney Erek L. Barron stated “the level of alleged fraud here is staggering.”

HyperFund was a reboot of the collapsed HyperCash Ponzi scheme. HyperFund’s collapse in late 2021 prompted three reboots; Hyperverse, HyperNation and HyperOne.

All of the Hyper* Ponzi schemes were operated under HyperTech, co-founded by Lee and Ryan Xu.

Xu, who also fled to Dubai in 2021, is conspicuously absent from the HyperFund indictments. It is unclear whether additional HyperFund indictments are pending.

Two additional individuals of note, both of whom were hired to publicly lie about HyperFund’s securities fraud, are Ronae Jull (aka Hope Hill) and James Lockett.

If convicted,

  • Lee is facing up to five years in prison plus monetary penalties and
  • Burton is facing two consecutive up to five years in prison sentences plus monetary penalties

Chunga faces up to five years in prison plus monetary penalties. This will most likely be reduced due to a cooperation plea deal.

Note that although ordered unsealed, at time of publication the HyperFund indictments remain under seal pending court clerk admin delay.

I’ll leave an update below when the indictments are unsealed.

 

Update 30th January 2024 – The SEC has filed civil fraud charges against Sam Lee and Brenda Chunga.

 

Update 31st January 2024 – Rodney Burton has been denied release.

The three HyperFund indictments have been unsealed. Not much to add then what we’ve already covered.

I’ve added the three separate criminal cases to BehindMLM’s calendar, so stay tuned for updates we continue to track the cases.