Operators of Forsage charged in U.S. for alleged $300-M ‘pyramid scam’

The founders and promoters of an international pyramid scheme operated by Forsage have been indicted in the United States, following an investigation conducted with the assistance of the Philippine Securities and Exchange Commission.

Forsage, a  crowd-funding platform, allegedly raised more than $300 million by duping millions of retail investors worldwide, including the Philippines.

In a statement issued on Aug. 1, the U.S. SEC said it had charged 11 individuals for their roles in creating and promoting Forsage. Indicted were the four founders of Forsage and three U.S.-based promoters, as well as members of Crypto-Crusaders, the largest promotional group for the scheme that operated out of at least five  states in the U.S.

The founders Vladimir Okhotnikov, Jane Doe aka Lola Ferrari, Mikhail Sergeev, and Sergey Maslakov launched Forsage.io in January 2020. Their website allowed millions of retail investors to enter into transactions via contracts that operated on the Ethereum, Tron, and Binance blockchains.

But Forsage actually operated a pyramid scheme, where investors earned profits by recruiting others, for more than two years. Forsage also used assets from new investors to pay earlier investors in a typical Ponzi structure, the SEC said.

SEC Philippines provided assistance to its U.S. counterpart in investigating the fraudulent investment-taking activities of Forsage by sharing information gathered by its Enforcement and Investor Protection Department (EIPD) in the course of its own investigation.

“We at the SEC Philippines commend the U.S. SEC for bringing down an investment scam of this scale and proportion, stopping it from further victimizing helpless individuals across the globe,” SEC chair Emilio Aquino said in a press statement on Wednesday.

The local corporate watchdog issued on Sept. 27, 2020 a cease and desist order (CDO) against Forsage for its illegal solicitation of investments through a crowdfunding platform.