SEC Files Lawsuit Against Geosyn Mining for Alleged $5.6 Million Fraud and Deceptive Practices
The U.S. Securities and Exchange Commission (SEC) has taken legal action against Geosyn Mining and its co-founders, Caleb Joseph Ward and Jeremy George McNutt, for allegedly orchestrating a $5.6 million fraud scheme. The lawsuit, filed on April 24 in Fort Worth, Texas, reveals shocking details of how approximately 64 investors were deceived by the company’s deceptive practices.
According to the SEC, Geosyn Mining misrepresented its operational capacities and financial dealings, selling service agreements under the guise of legitimate securities. The company allegedly exaggerated its relationships with electricity providers, claiming to secure energy at rates significantly lower than actual costs, leading investors to believe in the profitability of their investments.
Furthermore, Geosyn Mining is accused of failing to deliver the promised services outlined in its offering documents, including personalized crypto mining strategies and 24/7 monitoring of mining equipment. The SEC alleges that Ward and McNutt misappropriated around $1.2 million of investor funds for personal use, indulging in extravagant expenses such as meals, nightclubs, vacations, firearms, watches, and legal fees.
Notable misappropriations highlighted in the lawsuit include a $20,000 Las Vegas nightclub wedding celebration for Ward and a $49,000 family trip to Disney World funded by the company. The founders also reportedly used approximately $22,000 on expenses related to legal issues and incidents involving drunk driving during a crypto conference in June 2022.
The SEC’s complaint further reveals how Ward and McNutt engaged in deceptive practices to maintain investor confidence, creating fake documents showing fabricated mining production rates and profits. Despite Geosyn Mining generating only $320,000 from mining activities, the company distributed approximately $354,500 to investors, falsely presenting these payouts as profits from successful operations.
As financial strains mounted in early 2023, Ward issued IOU notes to investors for Bitcoin they were owed, hinting at a potential bankruptcy filing that never materialized. The SEC’s lawsuit seeks significant penalties against Geosyn Mining and its founders, including permanent injunctive relief, disgorgement of ill-gotten gains with prejudgment interest, and other equitable relief. This case serves as a stark reminder of the importance of due diligence and transparency in investment opportunities.
