Washington-based Pastor Francier Obando Pinillo has been charged for his involvement in “Solano Fi,” a fraudulent cryptocurrency investment business that Pinillo claims “came to him in a dream.” A pastor in a church based in Pasco, Washington, Pinillo allegedly took advantage of his position to sway members of the congregation to invest in Solano Fi, defrauding over a thousand victims of millions of dollars in what he claimed was a “safe and guaranteed investment.”
“Fraudulent investment schemes are not new, but cryptocurrency scams are a new way fraudsters take money from hardworking, honest people,” states US Attorney Vanessa Waldref.
The landmark case illustrates how cryptocurrency scams have now become mainstream. Fraudulent cryptocurrency schemes have previously been viewed as the province of highly organized hostile nation-state-backed cybercriminals and shadowy ‘market makers”. But the Pinillo case illustrates how even relatively unskilled crooks are now capable of preying on the greed of unsuspecting investors.
According to the indictment, Pinillo claimed that buyers would be able to receive a monthly return of 34.9 percent on their investment with no risk through “cryptocurrency staking,” a way in which investors can earn rewards by putting their cryptocurrency to work on a block-chain to help it run smoothly.
A modern-day pyramid scheme
Pinillo also allegedly attempted to turn the business into a modern-day pyramid scheme, convincing investors to recruit even more investors and promising them additional returns for every person they recruited. Pinillo reportedly told investors they could view and access their assets through an online portal, where they could also withdraw their money. In reality, the portal showed the users fraudulent balances and investment gains, and users were unable to withdraw from it.
When attempting to remove their money from Solano Fi, investors were allegedly met with a barrage of excuses. Pinillo is reported to have told them that either the website was down, investors needed someone to “buy out” their shares, or he was waiting until the cryptocurrency market improved before returning investments. Pinillo also allegedly told investors that they were required to send more money to “repair and upgrade the Solani Fi system” before they could get their investments back. Pinillo and co-conspirators reportedly transferred the cryptocurrency they received from victims into their own accounts.
According to the indictment, Pinillo also recruited investors through social media, including a Telegram group and a Solano Fi Facebook page, which is now filled with comments accusing Solani Fi of being “pure fraud” and warning others not to invest.
Solano Fi is merely one example that cryptocurrency schemes are increasingly becoming more commonplace in day-to-day life, and fraudsters are not solely lurking in far-flung places on the internet.
The US Securities and Exchange Commission warns the public about schemes using virtual currencies. They state that fraudsters are commonly “someone with a shared affinity,” who “exploit[s] the trust derived from being members of a group that shares… a national, ethnic, or religious affiliation.”
