A seventh lawsuit has been filed against BitConnect and several of its top promoters.
Baltazar Avalos filed his class-action lawsuit on February 22nd in California’s northern district.
Named as defendants in the suit are BitConnect, Joshua Jeppesen, Glenn Arcaro, Trevon Brown (aka Trevon James), Ryan Hildreth, Craig Grant, Nicholas Trovato (aka CryptoNick) and Ryan Maasen.
In his complaint Avalos alleges
BitConnect created and operated fraudulent Ponzi/pyramid schemes in the form of the BitConnect Lending Program and the BitConnect Staking Program.
Despite being cloaked in technological sophistication and jargon, Defendants operated a century-old fraud that was simple at its core—Defendants paid existing investors with new money from new investors, who were in turn expected and incentivized to get more new investors to produce more new money.
Both BitConnect’s investment opportunity and the BCC cryptocurrency it was attached to are defined as securities in the complaint.
In short, Defendants defrauded tens of thousands of investors by capitalizing on the general public’s excitement for digital currencies and by luring unsuspecting investors into purchasing
unregistered securities and participating in pyramid/Ponzi schemes.
Plaintiff Baltazar Avalos alleges he invested $110,000 into BitConnect.
On January 17, 2018, when BitConnect closed its lending and trading platform, Plaintiff held 410 BCCs.
As of February 22, 2018, 410 BCCs are worth approximately $1,271.
In addition to BitConnect’s shell incorporation in the UK, Avalos’ complaint identifies Joshua Jeppesen as BitConnect’s Development Director for the US and Europe.
Glenn Arcaro as a Director of BitConnect International PLC, one of BitConnect’s “most successful affiliates/recruiters” and manager of “a team of U.S.-based affiliates/recruiters”.
Arcaro is was so successful as a (BitConnect) affiliate marketer and organizer that he received a Porsche Carrera 911 S as a reward during a live broadcast of the BitConnect conference in October, 2017.
Arcaro is also believed to have created and orchestrated the “BCC School” – an online training program to “teach” the unsuspecting public how to participate in cryptocurrency investment opportunities, including the BitConnect investment programs.
Trevon James, Craig Grant, Nicholas Trovato and Ryan Maasen are identified as BitConnect affiliates who solicited “hundreds if not thousands of BitConnect investors in the US and abroad though social media sites such as YouTube and Facebook”.
Trevon James’ recommendation that US affiliates bypass the Texas cease and desist with a VPN and his labeling of BitConnect victims as “crybabies” is also documented.
Ryan Hildreth marketed the BitConnect Investment Programs through his website … which was touted as teaching “how to make an extra $1000-$5000+ per month” and targeted “ENTREPRENEURS WHO WANT THE FREEDOM TO MAKE MONEY FROM ANYWHERE IN THE WORLD, TRAVEL, AND CHOOSE THE LIFESTYLE [THEY] WANT TO LIVE!”
With respect to Craig Grant, he has been hailed as a “godfather” of BitConnect and began promoting the BitConnect Investment Programs in April 2017.
Nicholas Trovato was an extremely influential affiliate marketer who claimed to have become a millionaire as a result of his cryptocurrency investments.
Trovato’s participation and culpability in furthering the BitConnect pyramid/Ponzi schemes is further evident from the fact that he has recently taken to deleting all of his YouTube videos promoting any cryptocurrency investment opportunity.
Ryan Maasen also published dozens of YouTube videos promoting the BitConnect Investment Programs.
Further, Maasen appears to have primarily targeted raising investment from high school and college-age investors.
Across eight counts of relief, Avalos is accusing BitConnect and its affiliate promoters of
- violation of the Securities Act
- violation of California Unfair Business Competition law
- breach of contract (BitConnect)
- actual fraud
- constructive fraud and
- unjust enrichment
Avalos is seeking his complaint be designated a class-action and damages against the defendants.