On Monday, a former resident of Severna Park pleaded guilty to securities and wire fraud charges in connection with HyperFund, a cryptocurrency venture that was described by federal authorities as a billion-dollar fraud scheme. The guilty plea was made by Brenda Chunga at the U.S. District Court for Maryland, where she faced charges for her involvement in the fraudulent business.
Chunga was charged with conspiracy, along with two others affiliated with HyperFund, including Australian blockchain entrepreneur Sam Lee. The charges, which were unsealed on Monday, allege that the company promised investors high returns from non-existent “large-scale crypto mining operations”. The scheme, according to prosecutors, amounted to a total of $1.89 billion.
Prosecutors claim that Chunga sold fraudulent investment contracts through the company’s online platform and even promoted the business as “the world’s most sustainable passive rewards program” in a social media video. However, just a few months later, the company started blocking clients from making withdrawals, leaving investors with false promises.
As part of her plea agreement, Chunga admitted to personally receiving at least $3 million in fraud proceeds from her participation in the conspiracy. She will be required to pay back that amount in restitution and could face up to five years in prison. Her sentencing date has yet to be set.
U.S. Attorney Erek L. Barron commented on the staggering level of fraud in this case, reminding people to be cautious when approached with investment opportunities that seem too good to be true.
Chunga’s attorney, Jonathan P. Van Hoven, did not respond to requests for comment. According to a deed dated just over a week before her plea agreement, Chunga sold her Severna Park home for $1.25 million. It is unclear if she has relocated since then.
HyperFund, also known as HyperTech, HyperCapital, HyperVerse, and HyperNation, claimed to be a legitimate decentralized finance venture. However, it was actually a global securities and wire fraud scheme that defrauded investors of nearly $1.89 billion over the course of two years. Chunga, who went by the name “Bitcoin Beautee,” and Rodney Burton, a Miami resident known as “Bitcoin Rodney,” were both involved in promoting the company while Chunga lived in Maryland.
The company promised investors between 0.5% to 1% daily in “passive rewards” and claimed to double or triple investments through its supposed crypto operations. However, the rewards were paid out in a trading currency called “HU” or “Hyper Units,” which the company claimed was equivalent to the U.S. dollar. This claim was proven false by an IRS criminal investigations agent in support of charges against Burton.
Burton, who was arrested in Florida on January 4th, has been charged with conspiracy to operate an unlicensed money transmitting business. He appeared in court on Monday and was ordered to remain detained by U.S. Magistrate Judge Erin Aslan.
As regulators in multiple countries issued warnings to consumers about HyperFund, the company started blocking investors from making withdrawals around the summer of 2021. Further investigations by The Guardian’s Australian wing revealed that the company’s purported executive did not exist, and the scheme targeted investors in developing countries, leaving them feeling “suicidal” when they were unable to withdraw their funds.
