A former Severna Park resident filed a securities lawsuit Monday after a judge unsealed charges against him and two others affiliated with Hyperfund, a cryptocurrency venture that federal authorities say is a multibillion-dollar fraud scheme. Pleaded guilty to charges of fraud and wire fraud.
Brenda Chunga has pleaded guilty to conspiracy charges in the U.S. District Court for the District of Maryland, but federal prosecutors say her cryptocurrency business is paying investors from a “large-scale cryptocurrency mining operation” that doesn't actually exist. He was accused of promising false profits. The charges made public on Monday also include charges against Australian blockchain entrepreneur Sam Lee, who prosecutors say co-founded an international scheme valued at $1.89 billion. .
In a filing released Monday, prosecutors accused Chunga of selling fraudulent investment contracts through the venture's online platform. Months before he began blocking customers' withdrawals, Chunga described the business as “the world's most sustainable passive rewards program” in a social media video, according to court records.
According to the plea agreement, Chunga “personally received at least $3 million in fraudulent proceeds from his participation in the conspiracy.” She must pay at least the same amount in restitution and could face up to five years in prison, the U.S. Attorney's Office for the District of Maryland announced in a news release. Her sentencing date has not yet been set.
“The level of alleged fraud here is astonishing,” U.S. Attorney Erek L. Baron said in a statement. “Whether it’s crypto fraud or other financial fraud, if it sounds too good to be true, it probably is.”
Chunga's attorney, Jonathan P. Van Hoeven, did not immediately respond to a request for comment Monday afternoon. Chunga sold his home in Severna Park last year for $1.25 million, according to a deed dated a little more than a week before Chunga and prosecutors signed a plea deal in December. It was not immediately clear whether she relocated after she sold her home in Severna Park.
The venture, which bills itself as “legitimate decentralized finance,” also goes by names like HyperTech, HyperCapital, HyperVerse and HyperNation, and is a “worldwide Securities Fraud and Wire Fraud Scheme.” According to a separate indictment against Lee, 35, Chunga, sometimes referred to as “Bitcoin Boatie,” as well as Miami resident Rodney Barton, also known as “Bitcoin Rodney,” said the indictment. He is said to have promoted this business while living in Maryland.
According to Lee's indictment, the company claimed in a February 2021 presentation that those who purchased a “membership” would receive “passive rewards” of between 0.5% and 1% each day, and the company's virtual currency. He claimed that business-funded payments would double or triple the amount invested.
Investors were paid in “HU” or “hyper units,” a trading currency that the company claimed was equivalent to the U.S. dollar, IRS criminal investigators said in a Maryland case against Burton. wrote in an affidavit supporting the charges. The 54-year-old man was arrested in Florida on Jan. 4 on charges of conspiracy to operate an unauthorized money transfer business based in Maryland, according to court records. At a hearing Monday in Baltimore, U.S. Magistrate Judge Erin Aslan ordered Barton to remain in custody, according to a news release.
Around the summer of 2021, the venture began blocking investor withdrawals as regulators in multiple countries began issuing warnings to consumers about the company. A subsequent investigation by the Guardian's Australian division found there was no record of the existence of any of the alleged Hyperfund executives, and that the scheme was aimed at investors in developing countries who felt “suicidal” if their funds were blocked. It turned out that they were targeting homes.
