HyperFund Ponzi promoter Rodney Burton was arrested en path to Dubai again in January.
Since then Burton has been in custody pending the result of him prison case.
On June sixteenth, Burton filed a movement requesting a overview of his detention. Burton’s movement was denied on July ninth.
In his movement, Burton (proper) acknowledges the court docket deemed him to be a severe flight threat.
The Courtroom discovered by a preponderance of the proof that there was a severe threat that the defendant wouldn’t seem.
Additional, that the “nature/circumstances of offense contain vital quantity of belongings; weight of the proof is robust (witnesses, transaction information, recorded calls); historical past/traits of Defendant; vital belongings ($40k/month in revenue, yacht, autos), arrest at airport with 1-way ticket to UAE”.
Citing the Bail Reform Act, Burton’s legal professional argued he was “entitled to a presumption [he wouldn’t flee] in favor of launch pending trial.”
This argument was based mostly on Burton’s costs being non-violent and that Burton, a serial promoter of fraudulent funding schemes, didn’t know HyperFund was a Ponzi scheme.
Opposite to the Authorities’s declare of considerable proof of Mr. Burton’s involvement on this “Ponzi Scheme”, an goal overview of the transaction information and the recorded telephone name doesn’t set up the Mr. Burton had precise information of a “Ponzi Scheme” or intent to additional a conspiracy.
Bizarrely, in an try and discredit the DOJ’s assertion that he meant to flee to Dubai, Burton’s attorneys quote proof that helps Burton desiring to flee to Dubai.
On the detention listening to the federal government relied on a recorded telephone name between Mr. Burton and authorities cooperator, Brenda Chunga, that occurred on December 22, 2023.
An goal overview of the recording in its entirety doesn’t help the Authorities’s concept of Mr. Burton’s consciousness of guilt, or evasion of prosecution.
In response to Ms. Chunga’s assertion concerning prior enterprise dealings involving cryptocurrency, Mr. Burton shared that he has additionally been affected and that he was coping with lively court docket instances through which he had already gone to Courtroom for, expressing that “motherfucking feds out right here, man, doing investigations on me, doing every kind of shit” Recording at minute 28.50.
Additional, Ms. Chunga asks Mr. Burton that given what he’s going by means of “doesn’t that make you simply need to simply cease and never do that crypto factor because it’s the wild-wild west out right here?” Recording at minute 29.
To which Mr. Burton responded partially “No, I imply so long as you do what you presupposed to do, you do it proper …. I need to carry on making an attempt, I need to win, you already know and if I do die, I need to die making an attempt, you already know, die on my toes, not on my knees… preventing the nice struggle.
Recording at minute 29 – 30. Subsequently, Mr. Burton states that “in Dubai additionally, it’s the place, it’s authorized to do crypto”.
Burton’s legal professional claims his quoted statements are “self-serving excerpts … completely taken out of context”.
It needs to be famous that Burton hasn’t been charged with “doing crypto”. Burton has been charged with charged with conspiracy to function an unlicensed cash transmitting enterprise and working an unlicensed cash transmitting enterprise.
As one other distinguished HyperFund promoter, Brenda Chunga (proper) has already pled responsible to conspiracy to commit each securities and wire fraud.
Of their July 1st filed response to Burton’s movement, the DOJ opposed on the grounds Burton remained a “extreme flight threat”.
HyperFund was a Ponzi scheme.
Burton acquired a whole lot of wire switch and cashier’s checks totaling over $7,500,000 from people who wished to put money into HyperFund. Roughly 300 transactions totaling over $5,000,00 have been made after HyperFund started blocking investor’s capacity to withdraw funds.
Merely put, Burton took buyers’ useful fiat forex and transferred nugatory HU from his HyperFund account to the buyers’ HyperFund account.
Moreover, Burton has vital belongings that would facilitate his flight, has weak ties to the District of Maryland, and has a demonstrated disregard for governmental authority. All that militates in favor of detention.
In help of their assertion, the DOJ quotes the identical phonecall between Burton and Chunga as Burton’s personal legal professional’s did.
Burton’s that means was clear: He needed to attempt to “win” by persevering with to take part in cryptocurrency schemes. And he needed to take action in Dubai, the place crypto was “authorized” (not like in america, in Burton’s view), and the place he could be past the attain of the “[m]otherfucking feds” investigating him.
Sam Lee, co-founder of HyperFund, is cited for example and co-conspirator doing precisely what Burton allegedly deliberate to do.
One other defendant charged on this Courtroom within the HyperFund scheme, Sam Lee, the CEO of HyperFund, is presently believed to be in Dubai and avoiding answering for his crimes earlier than this Courtroom, simply as Burton seems to have hoped to do.
Addressing Burton’s legal professional’s argument concerning the recorded phone-call straight, the DOJ acknowledged;
Burton argues that when he referred to the “feds . . . doing investigations” on him, he was not essentially “conscious of this particular federal investigation.”
The truth that Burton could have been unaware of this investigation and needed to go to Dubai to keep away from different instances or investigations is unavailing.
On the contrary, it reinforces that Burton needed to go to a jurisdiction the place he might proceed to take part in cryptocurrency-related schemes, past the attain of federal investigators.
That’s the similar jurisdiction the place the CEO of HyperFund can be presently hiding out to flee justice.
Shockingly, regardless of being in detention and going through severe jail time, the DOJ reveals Burton continues to be making an attempt to relocate undeclared belongings to Dubai.
After making an attempt unsuccessfully to flee to Dubai to keep away from federal prosecution, Burton—even whereas detained—has continued to violate the legislation and try to maneuver belongings to Dubai.
On Might 9, 2024, CBP Savannah found an unmanifested 2022 Rolls Royce Cullinan, SLATV8C08NU214816, registered to “Bitcoin Rodney, LLC” on a container ship sure for Dubai.
In different phrases, it seems that Burton and his associates are nonetheless tried to maneuver Burton’s property to Dubai, the place it will likely be exterior the attain of legislation enforcement officers.
The federal government’s investigation additionally revealed that Burton has a minimum of one checking account that he controls in Dubai, and he has made monetary transfers to that account from his U.S.-based accounts.
As well as, investigators have recovered what seems to be a UAE residence allow that expires on September 14, 2024.
Proof additionally signifies that Burton is the within the technique of liquidating a wide range of U.S.-assets, together with promoting varied properties valued at tens of millions of {dollars}.
The DOJ additionally brings up Burton’s prison previous and ongoing substance use.
Burton is just not new to the prison justice system.
In 2007, he was convicted of conspiracy to distribute 500 grams or extra of cocaine, in violation of 21 U.S.C. § 846.
In that case, defendant Burton acquired a 60-month sentence. Burton additionally seems to have made conflicting assertion to Pretrial Companies representatives in Florida and Maryland on this case about his use of cocaine.
Particularly, earlier than his Rule 5 listening to within the Southern District of Florida, Burton informed probation officers that he final used cocaine “ten years in the past.”
However Burton then reported to pretrial officers within the District of Maryland that he used cocaine on New 12 months’s Eve 2023—days earlier than his arrest on this case.
This follows on to the DOJ asserting Burton’s aunt, a proposed custodian, being unsuitable for the position.
Burton proposes that he be launched to the custody of his aunt.
Right now, the federal government has restricted info concerning whether or not this proposed custodian can supply the supervision and ethical suasion to make sure Burton’s look.
Nevertheless, when interviewed by pretrial providers, Burton’s aunt denied that Burton has any historical past of use of illicit substances.
That assertion, coupled with Burton’s prior conviction and admission that he used cocaine on New 12 months’s Eve, calls into query whether or not his aunt is really conscious of her nephew’s precise habits.
At a minimal, it suggests she wouldn’t be an appropriate custodian.
Maybe not surprisingly, like quite a lot of crypto bros Burton was additionally a sovereign citizen nutjob.
Burton additionally seems to consider that he’s not topic to U.S. prison jurisdiction.
On the time of his arrest, Burton was in possession of a 27-page packet documenting his participation within the “sovereign citizen” motion.
The exhibited paperwork element Burton’s makes an attempt to “put himself past the attain of the authorized system.”
There may be each purpose to assume Burton would evade prosecution if given the possibility.
Burton’s professed perception that he’s not topic to governmental authority, taken collectively along with his demonstrated intent to flee the “feds” and his vital belongings, weighs strongly in favor of detention.
As to Burton not understanding HyperFund was a Ponzi scheme, the DOJ asserts
Burton is charged solely with working an unlicensed cash transmitting enterprise and conspiring to do the identical; neither cost requires proof that Burton knew that HyperFund was a Ponzi scheme.
Nevertheless, proof signifies Burton was not an unknowing dupe when it got here to HyperFund being a Ponzi scheme.
For starters, Burton billed himself as a deeply educated crypto investor. And, in a beforehand recorded dialog in New York, Burton admitted that he knew a earlier collapsed cryptocurrency scheme he had promoted was additionally a Ponzi scheme.
Maybe “Bitcoin Rodney” was fooled as soon as, nevertheless it strains credulity to consider he was fooled twice.
All mentioned and accomplished, the DOJ concluded;
There isn’t any situation or mixture of circumstances that may fairly guarantee Burton’s presence at future court docket appearances.
On July ninth the court docket sided with the DOJ and denied Burton’s movement for launch.
The character and circumstances of Burton’s offense are severe. He’s alleged to have acted as an unlicensed cash transmitter as a part of an virtually $2 billion cryptocurrency fraud scheme, taking tens of millions of {dollars} and givign them nugatory cryptocurrency in return.
Moreover, the load of the proof in opposition to Burton is robust.
The indictment outlines proof of a whole lot of unlawful cash switch transactions carried out by defendant Burton, who was clearly educated about cryptocurrency and glided by the skilled title “Bitcoin Rodney” – a public moniker that Burton used as a part of his fraud.
The telephone name famous above is even larger proof in opposition to Burton.
In accordance, having reviewed the submissions of the events and contemplating … components together with the character of the offense charged, the load of the proof in opposition to the defendant, the defendant’s historical past and traits, and the hazard he possesses to the neighborhood, Defendant’s Movement for Evaluation of Detention Order is DENIED.
Keep tuned for updates as BehindMLM continues to trace Burton’s HyperFund case.