SEC Obtains Assets Freeze in Cryptocurrency Mining and Trading Schemes
Litigation Release No. 24829 / June 5, 2020
Securities and Exchange Commission v. Daniel F. Putnam, Jean Paul Ramirez Rico, Angel A. Rodriguez, MMT Distribution, LLC, R & D Global, LLC, No. 2:20-cv-00301 (D. Utah filed May 7, 2020)
The Securities and Exchange Commission today announced that it has obtained an asset freeze and other emergency relief against Daniel F. Putnam, of Utah, Jean Paul Ramirez Rico, of Colombia, and Angel A. Rodriguez, of Utah, who allegedly defrauded investors of more than $12 million in two cryptocurrency-related schemes.
The SEC's complaint, unsealed today in federal court in Salt Lake City, alleges that, beginning in at least July 2017, Putnam operated a multilevel marketing business known as "Modern Money Team" and sold interests in a purported cryptocurrency mining operation to nearly two hundred investors. According to the complaint, Putnam misappropriated some of these investor funds and spent them on a condominium and other personal expenses. The complaint alleges that Putnam, Ramirez, and Rodriguez, then raised additional funds by offering so-called "cryptocurrency trading packages" to investors with the potential for high returns. In reality, as alleged, the defendants misappropriated investor funds for personal use and to make Ponzi-like distributions to earlier investors. According to the complaint, the defendants conducted these fraudulent schemes through two Utah companies controlled by Putnam, MMT Distributions, LLC and R & D Global, LLC.
The SEC's complaint, filed under seal on May 7, 2020, charges Putnam, Ramirez, Rodriguez, MMT Distribution, and R & D Global with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The complaint further charges Putnam, Ramirez, and MMT Distribution with violating the registration provisions of Sections 5(a) and 5(c) of the Securities Act, and names Putnam's father, Richard T. Putnam, as a relief defendant. In addition to the asset freeze and other emergency relief obtained, the SEC seeks permanent injunctions, disgorgement of ill-gotten gains with prejudgment interest, and civil penalties.
The SEC's investigation was conducted by Laurie Abbott and Scott Frost of the Salt Lake Regional Office and supervised by Regional Director Daniel Wadley. The litigation will be led by Amy Oliver. The SEC appreciates the assistance of the FBI, the IRS, and the British Columbia Securities Commission.