In brief
- RICO claims in a class-action lawsuit against a pastor were rejected by a federal judge.
- The pastor in question, Eddy Alexandre, pleaded guilty to commodities fraud in 2023.
- Last year, the CFTC secured a nearly $229 million penalty against him and his company.
A federal judge in New York rejected RICO claims underpinning a class-action lawsuit against a pastor and alleged associates on Thursday, finding that investors in what authorities have called a crypto Ponzi scheme could not move forward with efforts to pursue damages.
U.S. District Judge Ronnie Abrams found that a provision included in the Private Securities Litigation Reform Act of 1995 was grounds for tossing out the lawsuit because its claims were formed on “predicate acts of securities fraud” that weren’t actionable. In civil matters, RICO allows people to sue parties involved in racketeering activity like fraud or extortion.
However, Abrams noted that the people who say they were bilked out of money by a pastor affiliated with the Seventh Day Adventist Church have 30 days to file an amended complaint.
The lawsuit, brought in May, sought at least $750 million in damages in connection to losses that investors sustained in connection to a scheme crafted by EminiFX founder and former CEO Eddy Alexandre, who pleaded guilty to commodities fraud in 2023.
EminiFX billed itself as a trading platform for digital assets and foreign currencies. Prosecutors said that Alexandre raised $248 million from more than 25,000 people, promising that the platform could “double their money within five months” through secret technology.
Prosecutors said that Alexandre didn’t invest a substantial portion of the funds he raised from members of his church and the Haitian community, while also failing to disclose millions of dollars in losses on allocations that he did make before his arrest nearly four years ago.
What’s more, authorities said that Alexandre diverted $14.7 million in investor funds to his personal bank account. He later purchased a $155,000 BMW, they said.
At the time of Alexandre’s sentencing, the pastor was ordered to forfeit $248.9 million and pay $213 million in restitution. According to the Bureau of Prisons’ website, he is currently being held at a low-security correctional institution in Pennsylvania.
Last year, a different federal judge in New York ordered Alexandre and his company to pay nearly $229 million in connection to an enforcement action brought by the CFTC. Alexandre represented himself in the case.
Religious figures allegedly abusing positions of trust isn’t unheard of when it comes to crypto. In September, a Colorado judge found that pastor Eli Regalado violated securities laws while raising money for a failed crypto project that god supposedly told him to create.
Disclaimer: The information on this page may come from third parties and does not represent the views or opinions of Gate. The content displayed on this page is for reference only and does not constitute any financial, investment, or legal advice. Gate does not guarantee the accuracy or completeness of the information and shall not be liable for any losses arising from the use of this information. Virtual asset investments carry high risks and are subject to significant price volatility. You may lose all of your invested principal. Please fully understand the relevant risks and make prudent decisions based on your own financial situation and risk tolerance. For details, please refer to
Disclaimer.
Related Articles
Virtual Currency Investment Contract Invalid! Ningxia Court in China Mediates Virtual Currency Investment Dispute
Ningxia Xingqing Court concluded a virtual currency investment dispute. The plaintiff, Mr. Wei, almost lost the case due to an improper choice of cause of action. The case highlights the risks to the enforceability of virtual currency contracts; in particular, contracts signed after 2017 are often held to be invalid. The judge reminded investors to be alert to the risks related to contract enforceability, the choice of cause of action, and the burden of proof, so as to avoid losses of time and costs.
MarketWhisper18m ago
Huione crypto scam chairman extradited to China to face charges
Li Xiong, a central figure in a major crypto scam syndicate, has been extradited to China from Cambodia to face charges of fraud and money laundering after his arrest. His group's activities resulted in significant losses globally, prompting law enforcement actions.
Cointelegraph31m ago
Yinchuan court mediates a virtual currency entrusted investment dispute, with the defendant ordered to return the investment principal
The Yinchuan City Xingqing District People's Court concluded a virtual currency investment dispute case. The plaintiff, Mr. Wei, entrusted the defendant to invest, and later, after requesting repayment due to an urgent need for funds and failing to obtain it, brought a lawsuit for "unjust enrichment." The court held that the matter should be governed by a mandate contract relationship, and ultimately, through mediation, the plaintiff withdrew the lawsuit and Li returned the invested principal, and both parties reached a settlement.
GateNews33m ago
Gate Daily Report (April 2): The U.S. Department of the Treasury releases a notice of proposed rules for the “GENIUS Act”; the CFTC says it is prepared to regulate the entire crypto market
Bitcoin (BTC) dipped in the short term to $67,600. The U.S. Department of the Treasury launched a small consultation on regulatory guidance for stablecoins under the “GENIUS Act,” and the CFTC Chair said he is ready to regulate the entire crypto market. Amid market developments, spot Bitcoin inflows are slightly higher than outflows, and the CFTC and the SEC have signed an agreement to coordinate digital asset regulation.
MarketWhisper2h ago
Musk and the U.S. SEC over settlement talks for the Twitter acquisition dispute fail, and both sides will proceed to trial
Elon Musk and the U.S. Securities and Exchange Commission (SEC) failed to reach a settlement, and will head to trial to resolve allegations that he misled investors before acquiring Twitter. Both sides filed a joint case-status report, stating that the court’s alternative dispute resolution options are unhelpful.
GateNews3h ago
Schiff Warns Strategy Ad May Trigger Lawsuits over Bitcoin Risks
Schiff Flags Legal Risks in STRC Promotion
Peter Schiff criticized Strategy’s recent advertisement and questioned its portrayal of financial outcomes linked to STRC stock. He argued that the campaign presents an overly optimistic lifestyle narrative tied to investment performance, and that such mes
CryptoBreaking8h ago
