CFTC Sues Washington Pastor Over $6 Million Cryptocurrency Ponzi Scheme

The Commodity Futures Trading Commission (CFTC) has filed a civil action against Francier Obando Pinillo, a pastor from Pasco, Washington, accusing him of running a fraudulent cryptocurrency Ponzi scheme worth at least $5.9 million.

The complaint names Pinillo and its associated companies, Solanofi, Solano Partners Ltd. and Solano Capital Investments, known collectively as the Solanofi entities, as defendants.

Details of the demand

According to a Dec. 10 statement from the CFTC, Pinillo targeted at least 1,515 people in the United States, including members of his Spanish-speaking congregation. The complaint alleges that he misused his position as a trusted church pastor to further his fraudulent scheme.

He claimed to be the CEO of Solanofi, an automated trading platform that offered risk-free profits through high-yield trading of crypto assets. Pinillo falsely advertised guaranteed monthly returns of up to 34.9% and assured participants that the platform was safe and reliable.

The pastor gave participants access to an online dashboard that displayed fake account balances and profits to make the scheme appear legitimate. It also encouraged customers to involve friends and family by offering a 15% referral fee to recruit new people.

However, the document states that there was no trading platform, no trades took place and no profits were generated. Instead, Pinillo allegedly misappropriated all funds provided by clients.

The lawsuit also claims the defendant failed to disclose critical information when soliciting clients. Among the omissions, it failed to inform clients that Solanofi’s entities were shams, the trading platform was non-existent and online account statements were falsified.

In addition, he used funds from new participants to pay off old ones in what the CFTC described as a classic Ponzi scheme.

Restitution and similar cases

Following the enforcement action, the regulator is seeking restitution from defrauded participants, return of embezzled funds, civil monetary penalties, trading bans and a permanent injunction to prevent further violations of the Commodity Exchange Act and related rules.

The case against Pinillo is the latest in a growing number of such schemes in the crypto industry. In March, the U.S. Securities and Exchange Commission (SEC) alleged that 17 people were responsible for a $300 million Ponzi scheme targeting more than 40,000 Latino investors through a program called CryptoFX.

In August, the financial watchdog also filed complaints against two Georgia brothers accused of defrauding more than 80 investors in a bogus $60 million multi-level scheme.

In the same month, NovaTech Ltd. was accused of operating a sham operation that raised more than $650 million from more than 200,000 investors, including many from the Haitian-American community.

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