🎭SEC Charges Justinas Butkus with Orchestrating $4 Million Fraud
The SEC has charged Lithuanian national Justinas Butkus for running a $4.1 million fraud scheme involving fake mutual funds. Using aliases and doctored documents, Butkus lured in investors with promises of high returns from non-existent investment firms.
Key Points
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- 💸 Major Fraud: Butkus raised $4.1 million from 64 investors.
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- 🕵️ Alias Game: Used the name Darius Karpavicius and fake identities.
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- 🌐 Fake Firms: Operated fictitious companies TBO Capital Group and Gray Capital Group.
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- 🚨 SEC Action: Charged with violating registration and antifraud provisions.
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- 📅 Reinstated Case: SEC refiled the action after initial dismissal in January 2024.
🎭 The Master of Disguise
Justinas Butkus, a Lithuanian national, managed to pull off an elaborate scam, convincing 64 investors to part with $4.1 million. Under the alias Darius Karpavicius, Butkus created fictitious firms—TBO Capital Group and Gray Capital Group. These companies, with their professional-looking websites and high-yield investment promises, were nothing more than a facade. The managers touted on these sites? Completely fake. The investments? Non-existent. This was a sophisticated operation designed to enrich Butkus at the expense of unsuspecting investors.
💻 The Fake Investment Firms
In late 2021, Butkus ramped up his scheme, utilizing press releases and internet ads to sell shares in these sham mutual funds. Investors were led to believe they were dealing with seasoned professionals. The reality was quite different. The SEC's complaint reveals that Butkus was the puppet master behind the scenes, pulling all the strings. His so-called investment firms never made any real investments. Instead, he used the investors' money for personal expenses, including dining, cash withdrawals, and crypto asset purchases.
🕵️♂️ SEC's Crackdown
The SEC, not one to let such egregious fraud slide, has stepped in. Samuel Waldon, Acting Director of the SEC’s Division of Enforcement, emphasized the lengths Butkus went to deceive investors, highlighting the use of sophisticated websites and a doctored passport. The SEC's action includes charges against Butkus and his companies for violating federal securities laws, seeking permanent injunctive relief, disgorgement with prejudgment interest, and civil penalties. The SEC’s investigation was a collaborative effort, with significant contributions from the Division of Enforcement’s Office of Investigative and Market Analytics, as well as Homeland Security Investigations and the U.S. Attorney’s Office for the Southern District of New York.