A Cypress-based cryptocurrency executive now faces indictment for his alleged central role in an intricate scheme designed to defraud investors, bringing a spotlight onto the volatile world of digital assets and financial deception.
At the core of the elaborate deception were audacious claims made to prospective investors during a 2021 meeting in Georgia, where representatives for the cryptocurrency XUSD asserted that their digital coins were backed by vast precious mineral mines and an astonishing “Chinese imperial gun box” purportedly valued at an unprecedented $100 trillion.
This widespread investment scam unraveled following a multi-year FBI investigation, which was subsequently handed over to local authorities. The rigorous probe culminated in May with the indictment of the executive, along with seven other individuals, including XUSD founder James Nelson, in Baker County, Georgia.
Houston attorney Geoff Berg, who has a history of representing victims of similar cryptocurrency fraud cases, expressed profound skepticism regarding the claimed valuation. “Those types of numbers, I’m not even sure Apple’s got that kind of money,” Berg stated, adding, “I’m not sure the planet earth has that kind of money,” underscoring the sheer implausibility of the XUSD asset claims.
Prosecutors allege that the executive and his cohorts successfully raised more than $3 million in 2021 from unsuspecting investors. These substantial funds were then reportedly transferred directly to the individuals involved and channeled into various side ventures, rather than being used to secure the promised assets for the digital currency.
Further evidence presented by prosecutors includes a YouTube video filmed during a Steamrollers game halftime, where the executive boldly proclaimed XUSD to be “the most powerful stable coin in the world” and asserted it was “stabilized by an asset pool of $414 trillion in physical assets,” magnifying the scale of the claimed backing.
Berg also commented on the typical profile of victims in such cases, particularly when “the flag is as red as a $100 trillion Chinese gun box.” He noted that victims often include the elderly and those with impaired mental faculties or dementia, highlighting the predatory nature often associated with such high-stakes financial deception.
In a significant development last week, the Harris County Precinct 5 Constable’s Office executed a search warrant at the executive’s Cypress residence. Investigators meticulously searched the property for crucial evidence that could further link the individual to the operations of the fraudulent cryptocurrency company and solidify the case against him.
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