Following the arrest of top OmegaPro Ponzi promoter Juan Carlos Reynoso on June 30th, the DOJ was initially denied a motion seeking pre-trial detention.

The DOJ filed an emergency motion challenging the order on July 3rd. The court stayed Reynoso’s release and held a second hearing on the matter on July 23rd.

Following the hearing, on July 30th Reynoso was denied pre-trial release.

In arguing for Reynoso’s detention at the July 23rd second hearing, the DOJ brought up

  • Reynoso’s involvement in Thrive99X, a recently launched MLM pyramid scheme;
  • Reynoso failing to disclose his involvement in Thrive99X to pretrial services;
  • a real-estate listing for Reynoso’s Miami property, stating the “seller [is] motivated]”;
  • over $21.4 million deposited into Reynoso’s Binance account between 2021 and 2023, of which less than $2 million has been recovered to date;
  • concerns about Reynoso’s “extensive liquid and potential undisclosed assets”, including noncustodial cryptocurrency wallets only Reynoso has access to;
  • financial statements suggesting Reynoso has laundered money through ReyFer Digital, a company owned by Reynoso “and various third parties”;
  • Reynoso’s prior involvement in the MLM Ponzi schemes AirBit Club, Crypto World Evolution, iComTech and Tea Miner;

  • Reynoso acknowledging “AirBit Club and iComTech were Ponzi schemes”;
  • Reynoso refusing to “disclose the amount of cryptocurrency he has access to” to pretrial services;
  • Reynoso reporting “only one bank account” to pretrial services, despite being arrested “with a debit card” from a Spanish bank “in someone else’s name”, personally owning another Peruvian bank account and a South Korean bank account in ReyFer Digital’s name;
  • Reynoso engaging with human smugglers to transport a girlfriend from the Bahamas into the US; and
  • Reynoso failing to comply with a prior Puerto Rico Judge’s order, resulting in over $1.4 million in fines growing by $10,000 a day;

Considering the potential danger to the community and risk of flight posed by Defendant, the Government argues no conditions of release could protect the community and ensure Mr. Reynoso’s appearance before the Court.

Requiring Mr. Reynoso to remain at his house and submit to electronic monitoring would not stop him from continuing to engage in business ventures such as Thrive99X, potentially harming customers and investors.

The Government —and other governments— lack the ability to control and monitor cryptocurrency, making it difficult to know how many assets Mr. Reynoso has and how he is interacting with them.

This is shown by the millions of dollars from OmegaPro investments that remain hidden from the Government.

In his defense and in favor of pre-trial release, Reynoso argued;

  • he had strong ties to the US through four children and grandchildren;
  • his refusals to disclose cryptocurrency assets “were made on the advice of his attorney and were not meant to show a lack of counsel to the Court”;
  • his Florida property was off the market “but at least some of the listing have remained up due to the sheer number of realtors interested in selling the property”;
  • the contempt order against him is on appeal;
  • he was “the least culpable of the four individuals involved in managing OmegaPro;
  • his affiliation with human smugglers was a “one-time relationship” to transport a “flavor of the month” girlfriend into the US;
  • the additional bank accounts and debit cards “are for family members and a girlfriend in Panama”;
  • the South Korean Refer Digital bank account “has been closed for an “extensive period” of time;
  • there is no evidence of Thrive99X being “illegal or involved in any type of illegal activity”;
  • his acknowledge of past Ponzi schemes is “immaterial here as [Reynoso] was not a principal in these matters, nor was he charged by the Government”; and
  • his dealings with ReyFer Digital “were related to consulting”.

On Thrive99X, BehindMLM published its Thrive99X review on July 23rd. Based on Thrive99X’s business model, we concluded it was an MLM pyramid scheme.

Within a few days of BehindMLM’s review being published, Thrive99X disabled its website and deleted its social media accounts. But yeah, obviously nothing illegal going on there.

For reference, this is the court’s take on Reynoso’s involvement in Thrive99X after the second hearing;

Ultimately, the Court does not find the Government’s arguments to be sufficiently developed as to show Mr. Reynoso poses a danger to any person or the community through clear and convincing evidence.

There is insufficient evidence to show Thrive99X is engaged in illegal activity or that Mr. Reynoso’s work at Thrive99X or ReyFer threatens the financial security of others.

Reynoso also relied on family members making a showing at the second hearing;

[Reynoso’s] eldest daughter credits her father with bringing her family together and flew from New Jersey to Puerto Rico to speak on her father’s behalf in person before the Court.

His daughter and two other family members are willing to put up a $500,000 bond for him.

Vivian Reynoso (right) spoke on Carlos’ behalf at the second hearing.

As noted by the court;

Ms. Reynoso is a fulltime student who also works as a health and fitness coach and has obtained a degree of financial assistance from her father.

Ms. Reynoso is willing to sign any bond issued for Mr. Reynoso, cares for and trusts her father, and believes he would stay in the country if granted release.

When asked what her her father did for a living or how much time he spent outside of the US, Vivian replied she was “unsure”.

Ultimately the court found the bulk of Reynoso’s arguments unconvincing.

After considering the proffers of counsel, the arguments of the parties, and the transcript of the de novo detention hearing, the Court finds that the Government has proven by a preponderance of the evidence that no conditions of release could reasonably assure Defendant’s appearance as required.

Mr. Reynoso was charged with one count of conspiracy to commit wire fraud … and one count of conspiracy to commit money laundering. Both counts carry a statutory maximum sentence of twenty years.

Both offenses are serious, particularly given the significant amount of money at stake: $650 million, over half a billion dollars.

A significant amount of these funds remains unrecovered, representing potentially devastating financial losses to middle class investors, pensioners, retirees, and public service employees.

The severity of the offenses favors detention.

Pending the outcome of his OmegaPro criminal case, Juan Carlos Reynoso will remain behind bars.