Florida Man Faces Up To 5 Years In Prison For Involvement In Crypto Ponzi Scheme

A Florida man is facing up to five years in prison after he pleaded guilty to committing financial fraud using a crypto Ponzi scheme and making away with approximately $100 million in investment funds.

In a statement released on Sept. 8, the U.S. Department of Justice (DOJ) identified Joshua David Nicholas as the "head trader" for EmpiresX, a firm founded in 2020 and was publicized to investors as a legitimate cryptocurrency trading and investment platform.

Nicholas admitted that he "fraudulently promoted EmpiresX by making numerous misrepresentations regarding, among other things, a purported proprietary trading bot and fraudulent 'guaranteed' returns to investors and prospective investors in the company," according to the statement.

Nicholas reportedly disclosed that he and his co-conspirators told investors that they had a trading bot, an algorithm based on AI technology that places trades and whose goal was to maximize profitability for investors.

"EmpiresX operated a Ponzi scheme by paying earlier investors with money obtained from later EmpiresX investors," the DOJ noted in the statement. "EmpiresX never registered, nor took steps to register, EmpiresX's investment program as an offering and sale of securities with the U.S. Securities and Exchange Commission, nor did EmpiresX have a valid exemption from this registration requirement."

Nicholas' sentencing date has yet to be confirmed. The case is currently being investigated by the Miami field office of the Federal Bureau of Investigation and Homeland Security Investigations Miami.

EmpiresX founders Emerson Sousa Pires and Flavio Mendes Goncalves were charged by the SEC in June. The two allegedly fed money from later investors to the early investors and operated a Ponzi scheme while the rest of the money was used to "lease a Lamborghini, shop at Tiffany & Co., make a payment on a second home and more."

The DOJ is urging the investor victims of EmpiresX to come forward and learn more about their rights as victims, as well as their "ability to submit a victim impact statement" by checking out this webpage.