The Washington PostDemocracy Dies in Darkness

FBI says he ran a crypto Ponzi scheme. Investors refuse to believe it.

EminiFX chief executive Eddy Alexandre has been charged in connection with an online trading scheme

The symbol for bitcoin is seen above a currency exchange office in Bucharest last month. (Andrei Pungovschi/Bloomberg News)
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Faithfully, by 2:30 a.m. on Fridays, Frantz Victorin said he received at least a 5 percent return from EminiFX, an online investment platform that said people could get rich investing in cryptocurrency and the foreign exchange markets, also known as forex.

EminiFX chief executive Eddy Alexandre, a fellow Haitian native living in New York, would explain that investors could withdraw their profits and use the money to pay their mortgage, car note or other bills. Or, they could reinvest the returns, Victorin said.

“Everybody got paid,” Victorin said. “They got their profit in their e-wallet.”

Alexandre, who is also the founder, president and sole owner of EminiFX, was charged in connection with running a Ponzi scheme, according to a complaint filed in the Southern District of New York. The profits people believe they were making were not real, the complaint said.

But to this community of family, friends and fellow church members, Alexandre was like a shepherd leading a flock to what they hoped would be life-changing fortunes.

Six signs a cryptocurrency investment is a classic Ponzi scheme

The weekly returns were so big and consistent, a minimum of 5 percent and sometimes almost 10 percent, that Victorin projected he would become a millionaire after a little less than a year of investing with EminiFX.

“I took out at least four loans from different banks to make sure the dream he was talking about, as a family, we were ready,” Victorin said. He still has faith in Alexandre.

“We believe in this guy,” Victorin said. “We believe in our CEO. He is a good guy, a great guy. And we never met somebody like that, very down-to-earth, very respectful, transparent with a lot of charisma.”

Like so many other investors, Victorin, who lives in Massachusetts, attended Thursday night Zoom meetings, where he said Alexandre talked about being a part of a system where people could make their money work for them instead of them working for money.

“EminiFX is your sure path to financial freedom,” the company website promised. It was an appealing pitch that brought in millions of dollars from thousands of investors in the United States and abroad.

The FBI says the purported proprietary trading platform used by EminiFX was a fraud and that Alexandre was operating a cryptocurrency and foreign exchange Ponzi-like scheme that collected more than $59 million starting in September 2021 until he was taken into custody by the FBI in May.

The Justice Department complaint alleges the platform only invested a relatively small percentage of investor funds and misdirected around $14.7 million to his personal bank account.

“Each week EminiFX’s website falsely represented to investors that they had earned at least 5 percent on their investment, which they could withdraw or reinvest,” the federal complaint said. “Alexandre stated that if an investor invested $100,000, they would be a millionaire within two to three years.”

A separate complaint by the Commodity Futures Trading Commission alleges that only about $9 million of the $59 million raised from investors appears to have been sent to a futures commission merchant for trading purposes. The complaint alleges that trading by Alexandre at an online brokerage racked up over $6 million in losses.

Alexandre has been charged with commodities fraud and wire fraud offenses. Emil Bove, an attorney for Alexandre, did not respond to requests for comment. Alexandre entered a plea of not guilty, according to the Justice Department.

Cryptocurrency scams are now on the rise and draining investors

It appears that there were at least 62,000 active EminiFX user accounts, according to a preliminary status report by David Castleman, who has been appointed temporary receiver for EminiFX.

Despite the charges, the investor support of Alexandre is extraordinary. Investors have started a change.org petition defending him. More than 11,000 people so far have signed the petition with many offering prayers for Alexandre.

“I will continue to pray for him, with God by his side, he will come out victorious from this setup,” one person wrote. Many investors wrote that the government targeted Alexandre because he is Black and an immigrant.

“I believe the government is wrong,” one signer said. “They don’t like to see black people do nothing for themselves.” Another wrote, “I signed this petition because the CEO is innocent this is pure racism.”

Rechanka Doristil posted a YouTube video praying on behalf of Alexandre and other investors. “Every week I used to find the 5 percent that he promised or more,” she wrote in an email to The Washington Post. “He is not a scammer for sure.”

The voices of the cryptocurrency skeptics keep growing louder

Castleman said in his report that over $62 million has been frozen in a number of accounts in the names of EminiFX and Alexandre located at several banks, brokerages, and cryptocurrency exchanges.

Although his investigation is in its very early stages, Castleman said he “has not yet identified an account of EminiFX that contains revenue from an underlying business operation or any legitimate business activity that requires the ongoing use of the business premises or employees.”

Those who are rallying for Alexandre point to the $62 million that the receiver has located as evidence that EminiFX was not a scam. But in a Ponzi scheme, especially one that is relatively new, promoters can deliver promised returns, initially.

Even if there are little or no legitimate business or investment earnings, so long as most people don’t cash out, it is possible to make payouts from investor funds, not returns on any investments.

Even after explaining this to some EminiFX investors, they stood steadfast in their belief that Alexandre will be cleared of all charges.

I believe that they believe. They cling to their trust in Alexandre because the alternative, that they may have been duped, is unthinkable.

“Everything that we were promised, we got it,” said Markens Nicolas, who helped start the change.org petition. “I’m wondering if the charges are real.”

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