Longmont Bitcoin Ponzi Scheme Alleged By Feds

LONGMONT, CO -- About a month after angry investors turned to Boulder's Craigslist to complain about a Longmont bitcoin broker, the Commodity Futures Trading Commission (CFTC) filed a civil enforcement action against Dillon Dean and his company The Entrepreneurs Headquarters Limited (TEH) alleging the 26-year-old ran a "ponzi scheme" that misappropriated more than $1 million from more than 600 clients.

The complaint was filed Jan. 18 in the US District Court for the Eastern District of New York. It alleges Dean started a fraudulent Bitcoin scheme in April, 2017, registered in the United Kingdom. The company claimed to pool Bitcoins from members of the public and purchase investments, including "binary options." He fooled investors by "making Ponzi-style payments to commodity pool participants from other participants’ funds [and] misappropriating pool participants’ funds," the complaint alleges. He also failed to register with the CFTC as a Commodity Pool Operator (CPO) and Associated Person of a CPO, the complaint alleges.

Angry clients of TEH posted Craigslist warnings about Dean and TEH and called the Boulder Daily Camera when Dean alleged on his private Facebook group that his company's website had been infiltrated by hackers.

One investor, Collin Bercier, of Louisiana, took out an angry Craigslist ad about Dean, which has since expired. Bercier told the Daily Camera he invested $50,000 worth of Bitcoins in TEH.

"I'm kicking myself in the (expletive) because I should have done more due diligence on this," Bercier told the Daily Camera, describing himself as a veteran Bitcoin investor.

The CFTC complaint said Dean lied when he bragged he had trading experience in the Forex trading platform. He was never a registered Forex trader. The CFTC complaint is filled with verbatim Facebook posts allegedly made by Dean, filled with typos and spelling errors.

“CRAZY I detected a hacker, but everything is ok, and I have stopped who ever it was. I have
hared [sic] that some accounts got hacked, if they did, message me and I can fix the issue. If you
need to send me a message, send a fried [sic] request first if your [sic] not friends so the message
goes to my primary inbox.”

Dean also communicated with his clients via primitive YouTube videos seemingly recorded in a living room. Dean also had a criminal record, the Daily Camera reported:

[Dean's record] includes eight arrests across four counties for marijuana possession, traffic violations and driving under the influence; a warrant is currently open in Gilpin County for DUI with three prior arrests, a class 4 felony.

After Dean stopped communicating with his TEH clients, he allegedly started another similar company called Real Trade Profits, which also solicited Bitcoins that would be pooled and invested in options, the complaint alleges.

The action by the CFTC seeks "restitution to defrauded persons, disgorgement of ill-gotten gains, civil monetary penalties, permanent trading and registration bans, and a permanent injunction against further violations of the Commodity Exchange Act and CFTC Regulations, as charged."

Federal securities fraud criminal convictions carry penalties of up to 20 years' imprisonment.

Messages sent to Dean's Facebook and YouTube accounts were unanswered.

Read the CFTC complaint here:

Image via YouTube