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Federal Crackdown on Massive Crypto Ponzi Scheme

Federal prosecutors have charged two men—Michael Shannon Sims, 48, of Georgia and Florida, and Juan Carlos Reynoso, 57, of New Jersey and Florida—in connection with one of the largest cryptocurrency frauds uncovered in recent years. The pair is accused of running and promoting OmegaPro, a global pyramid-style investment scheme that defrauded investors out of more than $650 million between 2019 and 2023.

The indictment, unsealed in the U.S. District Court of Puerto Rico, lays out a sweeping case of financial deception, with prosecutors alleging that OmegaPro operated as a multi-level marketing scam cloaked in the appeal of crypto wealth and forex trading.

“This case exposes the ruthless reality of modern financial crime,” said Guy Ficco, Chief of Criminal Investigations at the Internal Revenue Service. “OmegaPro promised financial freedom but delivered financial ruin.”

False Promises of Guaranteed High Returns

OmegaPro lured investors with a seductive pitch: buy into “investment packages” using cryptocurrency, and in return, earn up to 300% profit over 16 months—returns allegedly generated through elite-level foreign exchange (forex) trading.

The DOJ said that thousands of victims from across the globe bought into this fantasy, believing that their funds were being expertly managed. In reality, authorities claim, the funds were being funneled through a classic pyramid scheme structure, where earlier participants were paid with the money from newer recruits.

Glitz, Glamour, and Deception

To maintain the illusion of legitimacy, Sims and Reynoso allegedly staged high-end events, flaunted luxury lifestyles, and leveraged social media to show off their supposed success. One of the most extravagant stunts included projecting the OmegaPro logo onto the Burj Khalifa, the world’s tallest building, during a lavish event in Dubai. Videos posted to LinkedIn show attendees in formal wear celebrating beneath the light display.

Such displays helped OmegaPro build trust with would-be investors who saw the company as a legitimate player in the booming world of crypto finance.

The Collapse and Cover-Up

By late 2022, OmegaPro claimed to have suffered a hacking incident. In response, the defendants told investors their funds had been safely migrated to a new platform called Broker Group. However, according to federal investigators, users were never able to access or withdraw their money from either OmegaPro or Broker Group. The platform quietly collapsed, leaving investors with devastating losses.

The Department of Justice has charged Sims and Reynoso with conspiracy to commit wire fraud and conspiracy to commit money laundering, each carrying a maximum penalty of 20 years in prison.

Multiagency and International Effort

The investigation was a joint effort involving the U.S. Department of Justice, IRS-Criminal Investigation, FBI, and Homeland Security Investigations, with assistance from international law enforcement partners. The case underscores the global nature of financial crime in the crypto era and the growing focus from regulators on shutting down digital investment scams.

Authorities have not ruled out additional arrests, as the investigation into OmegaPro’s full scope continues.

A Broader Warning to Crypto Investors

The OmegaPro case adds to a growing list of cryptocurrency investment scams that have preyed on global investors with promises of life-changing returns. According to Chainalysis, investment scams were the second-largest type of crypto-related crime in 2024, accounting for over $3.8 billion in illicit funds globally.

Financial watchdogs continue to urge caution, particularly with platforms that:

• Guarantee unrealistic returns
• Use referral-based marketing
• Operate without regulatory licenses
• Promote heavily through social media and influencer events