A federal grand jury indicted Emerson Pires, Flavio Mendes Goncalves, and Joshua David Nicholas on June 30th for their roles in the EmpiresX cryptocurrency Ponzi scheme. The indictment alleges the trio defrauded investors out of approximately $100 million through a fraudulent investment platform.

Launched in 2020, EmpiresX operated as a multilevel marketing scheme that marketed a cryptocurrency trading bot, the EX BOT. Pires and Goncalves aggressively promoted the venture, falsely assuring prospective investors that the platform offered a simple, safe, and flexible way to invest both cryptocurrency and fiat currency. They claimed investor funds were pooled into a common enterprise with the expectation of profits derived from the efforts of EmpiresX.

Under U.S. securities law, the EX BOT qualified as a security. This meant its offer and sale required registration with the Securities and Exchange Commission (SEC) or a valid exemption. The indictment states that Pires, Goncalves, and Nicholas never registered EmpiresX’s investment program with the SEC and lacked any such exemption, despite assurances to the contrary.

To conceal the lack of genuine revenue generation from the EX BOT, Pires and Goncalves allegedly laundered investor funds. These funds, collected from the United States and elsewhere, were moved through EmpiresX’s cryptocurrency wallets and foreign exchanges. The indictment also states that the defendants diverted investor money for personal use, purchasing luxury vehicles, designer clothing, and paying for legal defense.

The charges against the three men include conspiracy to commit wire fraud, conspiracy to commit securities fraud, and conspiracy to commit international money laundering for Pires and Goncalves. The Department of Justice is pursuing forfeiture of assets obtained through the scheme.

If convicted, Pires and Goncalves face up to 45 years in prison and fines equivalent to twice the amount they stole. Nicholas could receive up to 25 years in prison and a similar fine.

The day after the indictment, July 1st, a sealed court filing was made, which ScamTelegraph believes may relate to arrest warrants for the defendants. Pires and Goncalves, both Brazilian citizens, reportedly fled to Brazil upon learning of the U.S. investigation. Brazil does not extradite its own citizens. Joshua David Nicholas is a U.S. citizen. The U.S. Attorney's Office for the Southern District of Florida is prosecuting the case.