HOUSTON – The fear of missing out on the next big thing can cause people to make risky decisions.
KPRC 2 Investigates a Houston man accused of targeting the Latino community and people who are just trying to grow money for their families by investing in cryptocurrency. Our KPRC 2 Investigates team breaks down what federal officers say was a Ponzi scheme that cost some families their life savings.
Luxury cars, high-dollar hotels and ritzy restaurants
Federal investigators say Mauricio Chavez lived lavishly after swindling some 5,000 families out of more than $12 million.
“So, this is my contract right here, CFX Academy LLC.,” said Edgar Rodriguez.
Edgar Rodriguez gave CryptoFX, the company owned by Chavez, $5,000. Rodriguez and his brother-in-law went to the company’s building on Blalock where Chavez and other employees held classes, accepted money and made pay-outs.
“And you see people getting $20,000, $30,000 for a bonus for getting people in (and) we’re like, it actually sounds pretty good,” said Rodriguez.
In court documents obtained by KPRC 2 Investigates, Securities and Exchange Commission investigators say those payments were made “to provide the illusion that they had achieved significant trading returns when they had not.”
“When everyone would get their return back, everyone who was part of the company would say, “Oh, why don’t you invest more? You’re gonna get it back. You’ve seen that you’ve gotten it back. Why not?’” said Illiana Calles, CryptoFX victim.
It worked. Illiana Calles and her family received returns in cash several times, but now they’re out $100,000.
“And it was my mom’s savings. It was my savings. It was my sister’s savings,” said Calles.
A business built entirely by word of mouth within the Latino community, and SEC investigators say it was also built on lies.
They say 41-year-old Chavez appears to have worked as a landscaper before starting CryptoFX with no known background, education or training in trading or investment management. He operated in Houston, New Orleans, Chicago, Waco, Fort Worth, North Carolina and California.
While Chavez’s promotional videos are still all over Youtube and social media, he is nowhere to be found. The office building on Blalock is locked up and no one answered the door at addresses we found for his family members.
How CryptoFX got started
But in recent court filings, Chavez’s own attorney agrees with investigators about his client’s inexperience. Writing that Chavez started trading cryptocurrency with his own money in 2015 after friends asked him to teach them. He gave seminars at Denny’s restaurants and then students asked him if he would just do the trades for them.
In 2020, Chavez opened CryptoFX with two business partners. Chavez’s attorney said CryptoFX’s operation had no real management structure and almost no formal procedures. One business partner died of COVID and the other quit, leaving Chavez, “alone with a management task for which he was terribly ill-suited.”
Dozens of victims in the Houston area
But his victims, dozens of them who showed up outside the federal courthouse with pictures of Crypto FX employees, they say stole from them, aren’t buying it.
Here’s how the SEC says Chavez spent some of the money he stole:
- $460,954 Cars
- $267,623 credit card payments
- $196,513 retail purchases
- $110,358 travel
- $100,935 restaurants
- $19,000 jewelry
- $15,000 adult entertainment
Nine days after a court froze all of the company’s assets, surveillance video shows Chavez and other employees at his Blalock office counting cash in a plastic bag before they left the business for the last time.
Victims of CryptoFX asked to contact investigators
A court-appointed receiver is now trying to track down any remaining money or assets so investigators can use that to refund victims with whatever they collect if the SEC wins its case. If you lost money to CryptoFX, you should reach out to the receiver to let them know.
That website is here, which includes information about the ongoing case, a dedicated phone line (713-546-5653), and an email, firstname.lastname@example.org. The SEC encourages anyone who dealt with CryptoFX to use those contacts.
How to check if a trading company is legit
Before you invest any money with anyone, you should always make sure they are registered with the Securities and Exchange Commission. You can also see if they have been sued or sanctioned in any way.