Judge Rejects RICO Claims in Lawsuit Over Pastor-Led Crypto Ponzi Scheme

A federal judge in New York dismissed RICO claims underlying a class-action lawsuit against a pastor and alleged associates on Thursday, ruling that investors in what authorities have called a crypto Ponzi scheme could not move forward with efforts to seek damages.

U.S. District Judge Ronnie Abrams ruled that a provision in the Private Securities Litigation Reform Act of 1995 was grounds to dismiss the lawsuit because the claims were based on “basic acts of securities fraud” that were not actionable. In civil cases, RICO allows people to sue parties involved in racketeering activities such as fraud or racketeering.

However, Abrams noted that the people who say they were left out of money by a minister affiliated with the Seventh-day Adventist Church have 30 days to file an amended complaint.

The lawsuit, filed in May, seeks at least $750 million in damages related to losses suffered by investors in connection with a scheme by EminiFX founder and former CEO Eddy Alexandre, who pleaded guilty to commodities fraud in 2023.

EminiFX has billed itself as a digital asset and foreign exchange trading platform. Prosecutors said that Alexandre raised $248 million from more than 25,000 people, promising the platform could “double their money in five months” through secret technology.

Prosecutors said Alexandre failed to invest a substantial portion of the funds he raised from members of his church and the Haitian community, while also failing to disclose millions of dollars in losses on allocations he made before his arrest nearly four years ago.

In addition, authorities said Alexandre transferred $14.7 million in investor funds to his personal bank account. He later bought a $155,000 BMW, they said.

At the time of Alexandre’s conviction, the pastor was ordered to forfeit $248.9 million and pay $213 million in restitution. According to the Bureau of Prisons websitehe is currently being held in a low-security penitentiary in Pennsylvania.

Last year, another federal judge arrived in New York ordered Alexandre and his company must pay nearly $229 million in connection with an enforcement action brought by the CFTC. Alexandre represented himself in the case.

Religious figures allegedly abusing positions of trust are not unheard of when it comes to crypto. In September, a judge from Colorado found that Pastor Eli Regalado broke securities laws while raising money for that god’s failed crypto project supposedly said to him create.