The SEC accused Geosyn Mining Co-Founder of misusing $1.2 million of the investors. They stated that this amount is spent on holidays, nightclubs, and firearms.
The United States Security and Exchange Commission filed a lawsuit against Geosyn Mining and its co-founder. The SEC accused them of misrepresenting the number of rigs used for mining and using that amount for their own desires, resulting in $5.6 million in fraud.
The SEC filed a case on April 24 in federal court in Fort Worth, Texas, accusing Geosyn along with its CEO, Caleb Joseph Ward, and its former operating chief, Jeremy George McNutt, of deceiving their 64 customers. They defraud their customers with service agreements marked as securities between November 2021 and December 2022.
The SEC blamed Geosyn’s agreement with their customer to mine Bitcoin on their behalf and charge a fee for it. Geosyn claimed that they have contracts with the electricity providers for cheap electricity, but in reality, these charges were 40–50% higher than they told their customers.
Ward and McNutt also lied about Geosyn operations to their customers, the SEC claimed. In the service agreement, Geosyn entered into a contract to purchase 1400 rigs for mining, but they were unable to buy 400 of them. They don’t even buy most of the mining machinery online.
In the agreement with Geosyn, they told their customers to mine any coin they wanted, but in reality, they refused customers’ requests to mine any other coin than Bitcoin.
The SEC stated that the firm distributed Geosyn-made BTC payouts to make them “believe that their mining machines were operational and profitable when they were not” and created “bogus documents” with “fabricated mining production rates and profits.”
The SEC alleged Geosyn production and stated that this firm earned $320,000 while giving $354,500 to its investors. To cover the shortfall, McNutt bought Bitcoin and handed them over to Ward for distribution to investors, the regulator said.
SEC also claims that Ward and McNutt misuse $1.2 million of customers for their personal use. Further allegations stated that Mcnutt used a company card for the payment of $20,000 in a nightclub and $49,000 for a family trip to Disneyland.
The regulators also claimed that Ward and McNutt spent another $22,000 for breathalyzer devices and other expenses. Geosyn employees made separate arrests for drunk and driving cases in June 2022.
Source: SEC
SEC Accuses Geosyn of Fraud: Assets Plummet to $1900
During the last quarter of 2022, the frauds ended and Geosyn only had $1900 in the Bank. “unable to make a profit because it did not have the favorable electricity contracts that Defendants touted to investors,” SEC said
Mcnutt gave up his ownership in October 2022. Ward contacted the authorities to report McNutt for Embezzlement “without disclosing his misappropriations,” SEC stated.
With Geosyn in “dire financial straits,” Ward sent an Email to “IOU” for their Bitcoin. In June he said that he would file for Bankruptcy, which never happened, the SEC said.
The regulator wishes to prevent Geosyn, Ward, and McNutt from doing this. They also want them to return the money they took and pay fines.
Geosyn, Ward, and McNutt did not immediately respond to our request for comment.
