Earlier today, Ivars Auzins, a Latvian citizen, was extradited to the United States on a six-count indictment charging him with wire fraud, securities fraud, and conspiracy to commit wire fraud and securities fraud in connection with the operation of eight companies he allegedly offered, invested or mine digital assets. Auzins will be arraigned on the charges tomorrow in federal court in Brooklyn before Honorer Roanne L. Mann.
Breon Peace, United States Attorney for the Eastern District of New York, and Michael J. Driscoll, Assistant Director, Federal Bureau of Investigation, New York Field Office (FBI) announced the charges.
“Auzins ran a nefarious scheme in which he fleeced investors who put millions of dollars into fraudulent cryptocurrency,” the United States Attorney for the Peace said. “This office will continue to investigate and prosecute those who cheat and steal from investors, including those like the defendant who operate from overseas.” Mr. Peace thanked the Securities and Exchange Commission, New York Regional Office, for their assistance during the investigation.
As alleged in the indictment, Auzins, using an alias to hide his identity, operated a series of entities “Auzins Entities” advertised through email campaigns, social media and websites dedicated to cryptocurrencies. The Auzins entity claims to offer a valuable investment opportunity, solicits investment and then effectively disappears. Several Auzins Entities – Denaro and Bitroad Limited – claim to raise funds from investors through initial coin offerings (ICOs). Other Auzins entities – Impressio Estate Ltd., Broi Investments Ltd., also known as Bankroi, ChangePro Pty Ltd., Gemneon Investments Limited and Lycovest Ltd. – is considered a cryptocurrency investment platform that provides investors with different investment plans and profit levels. Another Auzins entity – Innovamine – claims to offer investment in the mining of several cryptocurrencies, including Bitcoin and Ether.
As alleged, Auzins and his co-conspirators induced investors to invest in Auzins Entities through a series of material misrepresentations and omissions about the products and services that Auzins Entities claimed to provide, the profits that investors would earn by investing in Auzins Entities and the individuals who operate them Auzins entity. For example, in marketing materials, Denaro stated that the Chief Executive Officer, “Ron Ramsey,” was previously an executive at a technology company based in Ohio, the Chief Financial Officer, “Jeremy Boker,” obtained a degree from a university in Kentucky, and that issued a debit card owning a credit card company based in New York. The representation is false. After soliciting investors in the ICO, Denaro ended its public advertising campaign, its website became inaccessible to the public, and investors lost their investments.
Between approximately November 2017 and July 2019, individuals in the United States and elsewhere transferred at least $7 million in digital assets to the Auzins Entities. Shortly after receiving the investment, the Auzins Entity disappeared without providing the promised service.
Allegations in an indictment are accusations, and the accused is presumed innocent unless and until proven guilty.
Government cases are handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorney John O. Enright was in charge of the prosecution with the assistance of Paralegal Jordi Martinez. The Department of Justice’s Office of International Affairs worked with law enforcement partners in Latvia to secure Auzins’ arrest and extradition to the United States, and the US Marshals Service carried out the extradition.
IVARS AUZINS (also known as “Aivars Grauzdins”)
EDNY Docket No. 21-CR-357 (ERK)