FLORIDA — A Florida man has pleaded guilty to conspiracy to commit securities fraud in connection with a global cryptocurrency-based Ponzi scheme that took in approximately $100 million from investors, the U.S. Department of Justice announced recently.
According to court documents, Joshua David Nicholas, 28, of Stuart, was the “Head Trader” for EmpiresX, a purported cryptocurrency platform. Nicholas admitted that he and others fraudulently promoted EmpiresX by making numerous misrepresentations regarding, among other things, a purported proprietary trading bot and fraudulent “guaranteed” returns to investors and prospective investors in the company.
Nicholas and his co-conspirators reportedly claimed that EmpiresX operated a trading bot that used artificial and human intelligence to maximize profitability for investors. Instead, the Department of Justice (DOJ) said EmpiresX operated a Ponzi scheme by paying earlier investors with money obtained from later EmpiresX investors.
In addition, despite representations to the contrary, EmpiresX never registered, nor took steps to register, EmpiresX’s investment program as an offering and sale of securities with the U.S. Securities and Exchange Commission, nor did EmpiresX have a valid exemption from this registration requirement, the DOJ said.
According to the DOJ, Nicholas pleaded guilty to one count of conspiracy to commit securities fraud and faces a maximum penalty of five years in prison. A sentencing date has not yet been scheduled. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division; U.S. Attorney Juan Antonio Gonzalez for the Southern District of Florida; Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division; and Special Agent in Charge Anthony Salisbury of Homeland Security Investigations (HSI) Miami made the announcement.
The FBI Miami Field Office and HSI’s Miami Field Office are investigating the case.
Trial Attorneys Kevin Lowell and Sara Hallmark of the Justice Department’s Fraud Section and Assistant U.S. Attorney Yisel Valdes for the Southern District of Florida are prosecuting the case.
All investor victims of the EmpiresX scheme are encouraged to visit the webpage https://www.justice.gov/criminal-vns/crypto-enforcement to identify themselves as potential victims and obtain more information on their rights as victims, including the ability to submit a victim impact statement.
