CFTC Sues Washington Pastor Over $6 Million Crypto Ponzi Scheme

The Commodity Futures Trading Commission (CFTC) has filed a civil enforcement 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. dollars.

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

Demand details

According to a report dated December 10 release 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 pastor of a trusted church to promote his deceptive scheme.

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

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

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

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

Additionally, he used new participants’ funds to pay previous participants in what the CFTC described as a classic Ponzi scheme.

Restitution and similar cases

Following the enforcement action, the regulator seeks restitution for defrauded participants, the return of misappropriated 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 United States 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 fake $60 million multi-level scheme.

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