Brazil Police, US Authorities Stop Transnational Crypto Fraud Ring Led by ‘Bitcoin Sheikh’
Brazil’s federal police and US Homeland Security Investigations (HSI), along with the help of several other enforcement agencies, have busted a global crypto fraud ring, according to a press release issued by US Immigration and Customs Enforcement (ICE) on October 6.
The Curitiba, Brazil-based crypto fraud ring took the form of a digital asset investment platform and was led by Franciso Valdevino da Silva, also known as the “Bitcoin Sheikh,” according to local media.
Da Silva and his company allegedly committed crimes such as international money laundering, operating a criminal enterprise, fraud and crimes against the domestic financial system.
The ring transported defrauded investors across a dozen countries by claiming to have developed full-fledged crypto-related financial products and by promoting false partnership ads and licenses. The victims invested millions in the cryptocurrencies with little or no value created by the ring.
Following the relocation of the head of the transnational criminal firm to Brazil in January 2022, HSI requested special agents stationed at the US Embassy in Brasilia, Brazil, for assistance from the Brazilian Federal Police in managing multilateral investigative activities.
“Operation Poyais”
Brazilian law enforcement conducted an investigation called “Operation Poyais,” in which they conducted 20 searches and raids across nation states, including Santa Catarina, São Paulo, and Rio de Janeiro. They found that the group laundered up to 4 billion Brazilian reais ($800 million), which they moved through the Brazilian banking system.
Police also found that da Silva’s company had a significant staff of skilled cryptocurrency traders who used the victims’ assets to make more profit from trading. The police confiscated the laundered assets along with gold bars, luxury cars, real estate, designer clothes, jewellery, watches and other expensive items.
Local media reported that several local celebrities were victims of the Ponzi scheme, including model, TV personality and actress Sasha Meneghel, who reportedly lost 1.2 million reals, along with unnamed soccer players. Other victims are based in the United States and “at least ten other countries,” according to authorities.
The lawyer for Da Silva said that such a raid is “the usual measure in investigative procedures of this nature” and that the client is cooperating with the police in the ongoing investigation.
