- US authorities and regulators abroad have already halted BG Wealth’s operations, yet it’s still scamming users for advance fees to withdraw their funds.
- The fees will supposedly cover the taxes on their earnings.
All the red flags were there, and even government websites warned people about it since last year. Yet, BG Wealth Sharing Ltd. still continued to lure people into investing in its promised crypto-based “lifetime” money-making scheme.
BG Wealth’s Advance Fee Scam
In a notice dated May 4, the Washington State Department of Financial Institutions (DFI) updated its warning about BG Wealth’s unscrupulous activities. US authorities, specifically the Department of Justice’s Federal Bureau of Investigation and the US Secret Service, have already clamped down on its operations by virtue of a seizure warrant. The crackdown included its associated exchange, DSJ Exchange.
Despite halting the platform’s operations and its linked exchange, reports revealed that BG Wealth has recently contacted its users to collect more money before they can retrieve their funds. DFI stated that it has been asking its users for an “advance fee” to allow them to withdraw their funds. The extra funds will supposedly cover the taxes on their earnings.
Unfortunately, the state regulator pointed out that such requests are only part of BG Wealth’s last-ditch “advance fee scam.” The scheme involves a company collecting additional funds for purposes including but not limited to taxation, commissions, or verification fees.
Additionally, DFI cautioned the public that scammers may direct people to other fraudulent websites. What’s more, desperate users may become targets of recovery scams, which also charge fees to victims in return for the supposed retrieval of their missing funds.
Basically, it’s one scam after another. All funds deposited on the platform have been deemed lost unless authorities can recover them, but even DFI admitted it can’t assist victims in recovering lost crypto funds.
The Company’s Modus Operandi
According to DFI, BG Wealth marketed itself as an investment group and “the world’s largest hedge fund.” The company and DSJ were incorporated in Colorado, but the regulator found that they used fake addresses in their filings. A self-proclaimed professor, Stephen Beard, founded the business.
The fake investment firm promoted its services on social media platforms, particularly Facebook, in several jurisdictions. Then, it communicated with its users via messaging apps such as WhatsApp, Telegram, Signal, or Bonchat, which DFI explained that legitimate investment companies usually don’t do.
BG Wealth generated “advanced trading signals” with “zero risk,” which customers used to trade in DSJ. The scammers have led them to believe that their investments are generating monthly profits of up to $1,500 for every $2,000 invested.
Furthermore, BG Wealth and DSJ claimed that they obtained licenses from the Securities and Exchange Commission (SEC). In reality, they submitted only partial forms and sought exemptions for their businesses. WFI clarified that these activities do not equate to registration with the securities regulator.
How Much Did BG Wealth Scam?
DFI operated internationally, with most of its activities flagged in the US, Samoa, and the Philippines. There are no available figures for the amount it scammed as of now, but unverified sources on forums and social media threads said it could be tens to hundreds of millions of US dollars, based on its cash flows and user base.
