The Commodity Futures Trading Commission has initiated a civil enforcement action against Francier Obando Pinillo, a pastor from Washington State, for allegedly orchestrating a fraudulent multilevel marketing operation involving digital assets.
The operation, conducted through entities known as ‘Solanofi’, targeted more than 1,500 victims, mainly Spanish speakers from the pastor’s church in Pasco, Washington.
Reportedly worth $5.9 million, the scheme promised clients guaranteed returns of up to 34.9% each month by purporting to run a risk-free leveraged staking platform for cryptocurrency trading.
However, the CFTC asserts that no such platform was available, no trading was executed, and all customer investments were misappropriated.
Pinillo’s deceptive practices
Utilizing his position as a trusted pastor, Pinillo gained the trust of his victims, many of whom possessed a limited understanding of cryptocurrency or trading. Presenting himself as the CEO of the Solanofi entities, Pinillo reassured clients that the platform’s automated system could yield remarkable returns through crypto trades.
To sustain the illusion, Pinillo provided clients with fraudulent online account statements and offered 15% referral bonuses to entice others to join the operation. These actions effectively formed a Ponzi-like structure, utilizing funds from new investors to pay artificial profits to earlier participants.
The CFTC’s allegations against Pinillo highlight omissions in his solicitations, including the absence of an actual trading platform, fabricated account statements, and misappropriation of client funds.
Payments presented as profits were derived from misappropriated resources. The CFTC is pursuing restitution for the defrauded clients, the disgorgement of funds, civil penalties, and a lifelong ban on Pinillo’s trading activities.
