Officials say Jeremy Sowerby's victims came from as far away as Sweden and Peru.
PHOENIX — The Arizona detective who first set out to track down a high-profile cryptocurrency fraud suspect discusses the extent of the cases against him.
“I received a barrage of emails and phone calls from investors,” said Corporation Commission investigator Toni Brown, who retired from her 34-year career as a law enforcement official in December. Speaking last month to 12News, Brown said she receives between 50 and 100 emails a day from people around the world claiming to be victims of Jeremy Sowerby's schemes. She says Arizonans should be wary of similar scammers.
“With the ease with which he was able to move from one company to another, I have no doubt there are others doing the same thing,” Brown said.
Sowerby ran scams using MLM tactics
Sowerby — a Fountain Hills man who ran several cryptocurrency investment companies with partner Luis Ortega — was federally indicted for a third time last month. They are accused of creating fake cryptocurrency mining bots and fictitious cryptocurrencies while attracting tens of millions of dollars from investors around the world. Evidence from the Arizona Corporation Commission and FBI investigation indicates that there are at least 800-900 victims of Sowerby's alleged crimes.
But this may be an underestimate.
As Brown points out, more alleged victims are coming forward every day.
“Sowerby schemes are run like multi-level marketing. You bring in one person and that person is offered an incentive to bring in friends and family or other people they know,” Brown said.
Sowerby was associated with Dunamis Global Technologies, My Block Chain Life, My Trader Coin, and others. His former friends say he learned multi-level marketing strategies more than a decade ago and applied those skills to his cryptocurrency-based companies.
The Arizona Corporation Commission took a civil case against Sowerby in 2022 before federal investigations filed its first criminal indictment in September of 2023. Sowerby remains behind bars and has pleaded not guilty.
“Unfortunately, a lot of people believed his sales pitch,” said Mark Dennel, director of the ACC's securities division. Dennell oversees Brown's department and leads a staff of about 50 attorneys, accountants and investigators who follow up on financial fraud tips.
“We filed a case related to two of his frauds, and obviously the U.S. Attorney's Office has filed cases related to different frauds,” Dennell said.
RELATED: Arizona Man Allegedly Used Banks of Bogus Computers to Obtain Investments in Cryptocurrency Scams
Arizona case rivals Netflix documentary
A new Netflix documentary released this week, Bitconned, chronicles the “CentraTech” scam in New York that was also fueled by crypto hysteria. However, it appears that the Arizona version may be more widespread. According to the Securities and Exchange Commission, the Centra scam raised more than $30 million from investors. According to one indictment against Sowerby, Sowerby's digital wallet collected more than $50 million alone.
Sowerby is accused of spending investors' money on real estate, cars and vacations. He also bought awards for top recruiters, prosecutors allege.
Although Sowerby now faces civil and criminal repercussions, the odds are not usually favorable for victims to recover all their money because financial fraud suspects spend lavishly, Dennell said.
“We (the ACC) will follow up what we can. They (the feds) will follow up what they can, and hopefully we can get some money for all the victims,” Dennell said.
“We have seen an explosion in the number of investors.”
Brown began following Sowerby's advice after moving to Arizona from Canada for the second time as many years ago. Brown says Sowerby's alleged victims include groups of professionals such as lawyers and doctors, who communicated with each other.
“The world of cryptocurrencies was new and exciting. People wanted to jump on the bandwagon. We saw an explosion in investor numbers and huge dollar amounts,” Brown said.
Arizona has historically had a national reputation for telemarketing scams and lax regulation of limited liability companies, or LLCs, Brown said.
“So I think those two factors make Arizona a haven for scam artists and it will take legislation to change these laws,” Brown said. “The SEC has begun to crack down on these companies, but they certainly have a long way to go.”
Dennell said he thinks Arizona's LLC laws are “not bad,” especially relative to some other states that “sell themselves on the basis that you can hide behind LLCs here.”
The ACC has new computer programs to help investigators track fraud and a new federal transparency law will go into effect this year that will help investigators identify financial fraud.
“It's something regulators are looking forward to because it will make it harder for fraudulent LLCs to hide their activities,” Dennell said. “This will give us and all investigators greater ability to figure out who is behind some of these scams.”
Prospective investors should contact the SEC's Securities Division
Dennell says the biggest hurdle to prosecuting fraud suspects is convincing victims to talk to authorities. Victims of financial fraud are often embarrassed or do not realize that they may have a case.
Brown and Dennell encourage anyone considering an investment opportunity to contact the SEC's Securities Division first.
“We have an investigator on duty. They will check the records to see if we have any information on them, to see if they are licensed to sell securities, if there have been any prior actions against them,” Denel said.
The ACC Securities Division may bring fraud cases before the Commission, the Supreme Court, or refer cases for criminal prosecution to local and federal agencies.
“I will give credit to the scam artists. They are very good at coming up with ways to get your money,” Dennell said.
RELATED: Phoenix man accused of defrauding more than 150 people through cryptocurrency scheme
Brown wants to give the ACC more power to shut down LLCs
Brown, who has served on the ACC for more than seven years, said she believes the state Legislature can do more to prevent suspects like Sowerby from affecting so many people. Brown said the Legislature should strengthen the ACC's ability to crack down on fraudulent LLCs.
The ACC is divided into two sections: the Corporate Division and the Securities Division.
“There is a complete separation between the securities division and the corporate division. Even if we go after a company and get a legal cease and desist order, the corporate division does not close that LLC. They allow it to stay open and active unless it meets their closing criteria.
Brown said she understands the Division of Corporations is not mandated by law to take action “in the way they need to in some cases.”
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