Investors were told by the couple that “Coach Wendy” would guide crypto trades, but the platform was fake and the advisor’s identity is still unknown.
Over $6.8 million in restitution and penalties has been ordered for a Tennessee couple who used their real estate connections to bilk investors through a fake crypto trading scheme.
A consent order was entered by the U.S. District Court for the Middle District of Tennessee against Michael and Amanda Griffis, the CFTC announced on Thursday. The Clarksville real estate agents operated the fraudulent “Blessings of God Thru Crypto” commodity pool from 2021 to 2023.
Charges were first filed against the couple by the CFTC in July 2023.
145 investors were convinced by the couple to surrender $6.5 million, using their real estate business connections, with the promise that the funds would generate profits through crypto futures trading. They claimed the legitimate Apex platform was overseen by the mysterious “Coach Wendy,” the regulator said.
Under the court order, more than $5.5 million must be paid by the couple to the victims. They also face an additional civil monetary penalty of $1.35 million.
Money was funneled by the Griffises into a sham platform modeled on an overseas exchange, while the true identity of “Coach Wendy” remains unknown to investigators.
Over $4 million was funneled offshore after hitting the fake exchange, while the rest covered the couple’s personal debts and expenses. The CFTC stated that only about $855,000 was paid back to participants in Ponzi-style payouts.
Lifetime bans preventing them from commodity trading or CFTC registration have been imposed by the ruling, which also bars future violations of federal commodity laws.
The exploitation of trust within community groups is a troubling pattern, and this case highlights it. For example, a Denver pastor and his wife were recently ordered to repay $3.39 million after they raised millions for worthless church tokens. Another example is a Long Island man who received a $228 million CFTC judgment.
In the latest case, warning signs that could have pointed to the fraud may have been overlooked by investors.
It was noted by Karan Pujara, founder of scam defense platform ScamBuzzer, that an exchange website lacking registered company details is a clear red flag that could have been noticed by users.
Expert Warns of Fast-Moving Crypto Frauds, Urges Diversification to Limit Losses
Fraudsters frequently pursue “quick money,” aiming to evade capture, Pujara stated. He warned that in crypto, once funds are lost, they can be moved “across borders quickly,” which makes recovery a challenge.
It was noted that even regulated platforms can fail investors, as seen with FTX, which held licenses but still misused customer funds.
A suggestion to diversify risk by using multiple exchanges and hardware wallets was given by Pujara, who noted that those who spread their investments kept their losses manageable, while those who concentrated all their funds in one location faced major losses.
