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The Securities and Exchange Commission (SEC) has filed a law suit against Geosyn Mining and its management team, Caleb Joseph Ward and Jennifer George McNutt, for a fraud of $5.6 million that left investors in a deficit. The suit was first filed on April 24 in a federal court, and it assesses the scenario as falsification and personal gain at the expense of trusting investors.
Misappropriation of Funds for Luxuries: The SEC’s Allegations
As per the SEC, Geosyn Mining, led by Ward and McNutt, was involved in the fraud that portrayed the activities falsely and took the money of investors for their own luxury expenses. The company allegedly wooed in around 64 investors between November 2021 and December 2022 and sold service agreements as securities. These contracts, purportedly attesting to the company’s profits from cryptocurrency mining, made inaccurate claims about the company’s capabilities and financial status (cost).
The charges leveled against the SEC expose a whole network of fraud. Geosyn Mining supposedly overstated its mining performance, with hundreds of rigs being abandoned and the majority of those acquired left inactive. In addition, investors were also misinformed that their ability to choose when and which currency to mine appears to be limited to Bitcoin only, it was reported.
Fabricated Mining Production Rates: Deception Unveiled
The SEC states that Geosyn Minging also faked documents to simulate mining profitability and even went further by issuing bitcoin payouts to sustain the myth of an operational success. However, the reality was starkly different: the company had $320,000 in Bitcoin mining profits while it distributed over $354,500 to its investors. It maintained this deficit by misusing other investors’ investments.
The lawsuit paints Ward and McNutt as having spent investors’ money on their personal extravagances rather than keeping it for safer investment options. According to the SEC, Ward and Hopes spent up to 1.2 million dollars of investor money on non-business-related items, such as meals, trips, guns, and a $20,000 “Las Vegas nightclub wedding celebration.” By additionally using investor funds to pay for his legal bills, Ward further harmed his position as a trustee.
Geosyn Mining concluded the 2022 run with only 1900 dollars left in its bank account. Even though the condition of the company was so fragile, Ward simply omitted his own embezzlement while blaming McNutt for the embezzlement. The June 2023 bankruptcy predictions of GeoSyn did not come to pass, leaving investors wondering.
The SEC is fighting for justice for defrauded investors, asking for a permanent ban, a refund of all misappropriated funds, a fine, and a possible imprisonment for the accused trio. The legal process involving Geosyn, Ward, and McNutt goes ahead without their availability for comment.