A civil class action has been started in Florida by two EmpiresX victims.
In addition, EmpiresX is being sued in civil regulatory proceedings by the CFTC and SEC.
What’s intriguing is the Florida state court overseeing the class-action has designated an EmpiresX Receiver.
Today’s events on BehindMLM’s schedule included the CFTC and SEC EmpiresX lawsuit dockets.
The CFTC case docket didn’t contain any fresh information. However, I was drawn to a request for additional time to file a Joint Scheduling Report in the SEC docket, which inspired me to write this:
Defendant Empires Consulting Corp. is now in receivership by a Florida state court.
This was the first time I had read or heard of a Florida state lawsuit or an EmpiresX Receivership.
A class action lawsuit against EmpiresX was filed on June 10th, according to a search I did for the case in Florida.
Class Action Defendants Both Eric Villanueva and Francisco Gonzalez are citizens of Florida.
Plaintiff Through an EMPIRES-X recruiter, Eric Villanueva joined EMPIRES-X in August 2021.
His initial donation was $9,500, and he continued to make contributions up to April 2022, reaching $25,000 in all.
He has not received any money from EMPIRES-X DEFENDANTS in connection with his investment.
Through an EMPIRES-X recruiter, plaintiff Francisco Gonzalez joined EMPIRES-X in October 2021. He made an initial commitment of $4,200 and did not make any more donations.
He has not received any money from EMPIRES-X DEFENDANTS in connection with his investment.
It is unknown who brought Gonzales and Villanueva into EmpiresX.
Empires X Corp, Empires Consulting Corp, EmpX Management LLC, Emerson S. Pires, Flavio M. Goncalves, and Joshua David Nicholas are named defendants in the class-action lawsuit.
This is a well-known, yet regrettable, tale of how a bitcoin Ponzi scheme in South Florida targeted unsuspecting victims.
Only with the willing cooperation of other “reputable” accomplices were these seasoned thieves able to steal tens of millions of dollars; they are currently on the run with Plaintiffs’ and Class Members’ money.
A connected non-party is identified as CoinBase. The cryptocurrency exchange is charged with aiding EmpiresX in the “significant amount” of investment monies that was laundered.
Given the significant amount of activity occurring through the COINBASE accounts of EMPIRES-X and EMPIRES-X DEFENDANTS, COINBASE ought to have been made aware of the suspicious behavior and should have looked into the accounts right away.
Despite the legal standards that COINBASE had to follow as a Money Services Business operating under the FinCEN section of the U.S. Treasury Department, COINBASE chose to ignore the clear warning signs.
COINBASE could have simply confirmed that the cryptocurrency assets, such as Bitcoin, Ether, and USD Tether, were truly generated from reputable sources, but did not do so.
In reality, COINBASE is required by the Bank Secrecy Act to investigate and/or report any instances of suspicious conduct involving the transmission of money.
The assets being liquidated through COINBASE’s exchange were not legitimately the property of EMPIRES-X and/or EMPIRES-X DEFENDANTS, as was known to COINBASE or should have been known.
COINBASE did little to stop the atrocities that it enabled.
The class-action lawsuit filed by Villanueva and Gonzales, which frequently references BehindMLM’s research, describes the EmpiresX Ponzi scam and its ultimate demise.
Numerous victims of the EMPIRES-X scam, many of whom lost their life savings, include thousands, if not millions, of people both domestically and abroad.
There are as many as 1.2 million accounts registered with EMPIRES-X, according to some recent reports.20 EMPIRES-X DEFENDANTS have reportedly made, conservatively, 60 million dollars.
Villanueva and Gonzales are attempting to represent EmpiresX victims through their attorneys.
Although the precise number of class members is still unclear, there are, in our opinion and knowledge, at least thousands of potential Class Members.
It will be revealed via discovery what the precise number is. In actuality, the Undersigned Counsel is actively defending over 85 EMPIRES-X consumers who have lost millions of dollars in total to the EMPIRESX PLATFORM.
A motion for a temporary restraining order, an asset freeze, and the appointment of a receiver was filed with the proposed class action.
On June 21st, the court approved the motion to appoint a Receiver.
The Plaintiffs served copies of the Emergency Complaint, the Emergency Motion, and the Notice of Hearing about the Emergency Motion on the last known registered agents for the Defendants after filing the Emergency Motion and the underlying Emergency Complaint in the above-captioned action and before the hearing thereon, the Court has been informed.
The affidavits that the Plaintiffs presented served as the foundation for all declarations of fact in this order.
In the current case, the defendants persuaded the investor plaintiffs to fund the defendants’ alleged investment plan.
In addition to the Plaintiffs, the attorneys for the Plaintiffs have offered a declaration stating that they also represent over 160 other customers who made investments in the investment scheme of the Defendants.
SCOTT DIMOND, Esq. is chosen to serve as EMPIRES X CORPReceiver .’s (the “Receiver”). All other organizations run, managed, or otherwise connected to the operations of the defendants, including EMPIRES CONSULTING CORP and EMPX MANAGEMENT LLC, shall be assumed to be included in the term “Receivership Entities” and shall serve until further Order of this Court.
In a nutshell, EmpiresX and its assets are now under the control of the EmpiresX Receiver.
The empires Receiver has so far
issued subpoenas to TD Bank, CoinBase, and GoDaddy for records about EmpiresX (June 24th)
Emerson Pires, Flavio Goncalves, and Joshua David Nicholas were served with subpoenas seeking Empires X-related data (July 1st)
It’s noteworthy to note that Pires, Goncalves, and Nicholas have all had legal processes served on them at well-known Florida residences.
Contrary to what is assumed, Nicholas is not in detention despite being charged. Pires and Goncalves, according to the SEC and CFTC, have fled to Brazil.
On June 30, a lawsuit was brought by the SEC and CFTC against the EmpiresX defendants.
The empires Receiver submitted his first Status Report on July 21. The Receiver informed the court in the report.
Coinbase has identified documents that are pertinent to the Receiver’s request but has recommended an entry of secrecy before sending them up, but TD Bank “has not located documents responsive to the Receiver’s request.”
GoDaddy has affirmed that it will assist in providing the Receiver with the domain name for EmpiresX’s website;
The empires Receivership was in contact with the SEC and CFTC regarding their respective civil cases, with a decision on how both regulators will proceed regarding the Receivership still pending; by the SEC’s and CFTC’s assertions, Pires and Goncalves “have disappeared and are believed to have fled to another country.” Interactive Brokers Corp. had been served with a subpoena on July 1 but had not yet responded.
None of the Receivership Entities are yet in the Receiver’s custody, possession, or control.
The Receivership Entities’ custody, control, possession, or ownership of any bitcoin wallets, brokerage accounts, or other types of accounts has not yet resulted in the discovery of any material assets.
The Receiver will keep trying to seize custody, ownership, or control of the assets belonging to the Receivership Entities.
After Interactive Brokers Corp. failed to reply to the EmpiresX Receiver’s subpoena on August 18, the Receiver filed a motion to compel.
Even while it is common for financial institutions to reply to subpoenas late, more than five weeks have elapsed from the July 8, 2022 return deadline, and IAB hasn’t even been in touch with the Receiver to talk about the subpoena.
This Court should issue an order requiring IAB to provide the required papers and to provide justification for not being penalized for failing to comply with the subpoena based on its failure to present.
The 26th of August has been set aside for a hearing on the Receiver’s IAB show cause petition.
The Receiver also submitted his second status report to the court on August 18.
The Receiver informed the court in the report.
He was still in contact with the SEC and CFTC, neither of which had made a decision regarding how to handle the Receivership situation, and there had been no change about recovering EmpiresX assets from the previous report. GoDaddy had helped him take control of EmpiresX’s website domain and disable it. He had also reached a confidentiality agreement with Coinbase, who had since provided the Receiver with requested production.
The IAB show cause hearing that was originally set for August 26th was rescheduled for August 24th on August 22nd (later today). Keep in mind that the case docket still shows the August 26th hearing as planned.
On September 12th, there will be an initial case management conference. I’ll give an update below pending the conclusion of the show cause hearing that is planned for today.
Typically, the DOJ (criminal) comes first in adversarial proceedings, followed by federal regulators (SEC, DOJ), and then civil lawsuits (typically investors trying to get their money back).
Federal regulators and the DOJ both intervene in instances involving federal regulations and successfully seek stays of such cases.
That is, at least, how things usually work out. In this MLM fraud case, the appointment of a Receivership has been independently ordered by a state-level court as a part of victim civil proceedings for the first time that I can recall.
At some time, I believe the SEC, CFTC, or perhaps the DOJ will get involved, but that hasn’t occurred just yet.
Before anybody who invested in EmpiresX and lost money asks, the class action is not yet open to you.
We’ll keep you informed if unexpectedly EmpiresX class certification is granted or the lawsuit is postponed.
Updated on August 25, 2022. The empires Receiver’s production subpoena must be complied with, and Interactive Brokers Corp. has been instructed to do so.
Interactive Brokers Corp. has until August 24th to comply with the order or provide the court with justification as to why they shouldn’t be found in contempt.