The US Department of Justice accused Bitex and Ohana Capital Financial of cryptocurrency fraud

The Utah District Attorney’s Office in the United States has accused the founder of Bitex LLC and Ohana Capital Financial, James Wolfgram, of fraud using digital assets, defrauding investors and money laundering.

James Wolfgramm, known as Semisi Niu, James Vaka Niu and Spanish Fork, is charged with seven felony counts, wire fraud and money laundering through crypto assets. Due to his cryptocurrency fraudulent schemes, investors suffered large losses, and many of them did not have sufficient knowledge about working with crypto assets.

Wolfgramm used various aliases on social media, posing as a multimillionaire. To impress potential investors and inspire their confidence, he published photos of luxury cars, expensive watches and other luxury items. However, investigators determined that these were other people’s photos taken from other social media accounts.

Wolfgramm swindled two investors out of $1.7 million by selling them a “powerful cryptocurrency mining machine” called the Bitex Blockbuster. Wolfgramm demonstrated one of the devices in his office, ostensibly connected to a screen that showed a pre-recorded mining cycle, giving the impression of efficient equipment.

As for Ohana Capital Financial, the company provided financial services to unbanked individuals. Wolfgramm managed to collect several million dollars from clients as a deposit. This money was to be kept in client accounts until the users themselves wanted to withdraw it. However, the funds were spent on business expenses unrelated to the company.

As the number of cryptocurrency fraud cases has increased over the past few years, this month the US Department of Justice announced the creation of a National Cryptocurrency Enforcement Group. The task force will also be involved in the investigation of digital asset crimes.