Latvia has extradited to the United States man suspected of embezzling USD 7 million

  • 2022-08-31
  • LETA/TBT Staff

RIGA - Latvia has extradited Latvian national Ivars Auzins to the United States for criminal prosecution, who, together with his accomplices, is suspected of embezzling USD 7 million, LETA has found out.

The State Police, without revealing the person's name, previously informed that the suspect, together with accomplices, had committed fraudulent activities by creating fake investment platforms.

The U.S. Securities and Exchange Commission (SEC) in 2021 charged the Latvian citizen with defrauding hundreds of retail investors out of at least USD 7 million through two separate fraudulent digital asset securities offerings.

According to the civil complaint, filed in U.S. District Court for the Eastern District of New York, Ivars Auzins defrauded U.S. and foreign investors through the unregistered offer and sale of digital asset securities in an initial coin offering and a purported digital asset cloud mining program. Auzins allegedly used fake names, fictitious entities, and fraudulent profiles to perpetrate his schemes, and misappropriated nearly all of the investor funds that were raised.

In the first scheme, the complaint alleges that, from January 2018 through March 2018, Auzins fraudulently offered and sold unregistered digital tokens as part of an ICO of Denaro, a purported "multi-currency debit card platform." Specifically, the complaint alleges that Auzins falsely claimed Denaro enabled users to store their digital assets in a secure digital wallet and then spend them "like any other debit card" which could be provided by a credit card issuer. In fact, the complaint alleges, all of the claimed products or services being offered were fictitious, including the relationship with the credit card issuer. Finally, the complaint alleges that Auzins misappropriated all of the ICO’s proceeds.

In the second scheme, the complaint alleges that, from April 2019 to July 2019, Auzins fraudulently offered the unregistered securities of Innovamine, which purportedly offered a cloud mining program. According to the complaint, Auzins claimed that investors could contribute digital assets to Innovamine, and then the company would perform mining activities and provide investors with a daily "automatic payout . . . in whichever coin they mine." The complaint alleges that these promises were untrue, and that Auzins misappropriated nearly all of the funds raised in the offering.

"As we allege, Auzins was engaged in a brazen scheme to defraud retail investors under the guise of profitable digital asset opportunities," said Kristina Littman, Chief of the SEC Enforcement Division’s Cyber Unit. "We will continue to detect and pursue those that seek to victimize investors in the digital asset space."

The SEC’s complaint charges Auzins with violating the antifraud and registration provisions of the federal securities laws, and seeks permanent injunctions, including conduct-based injunctions, disgorgement plus prejudgment interest, civil penalties, and an officer-and-director bar against him.