SEC files charges in $1B 'get rich' crypto scheme and $12M fraud

SEC files charges in $1B 'get rich' crypto scheme and $12M fraud
A man and entities he controls have been charged for allegedly selling unregulated securities and for fraudulent use of some of the proceeds.
AUG 01, 2023

A man has been charged by the SEC for misappropriating millions of dollars invested by people who believed they would become ‘rich’ from cryptocurrencies.

Richard Heart, also known as Richard Schueler, and three entities he controls are accused of selling unregistered securities, namely crypto assets that raised $1 billion from investors who were told claiming it was the first high-yield “blockchain certificate of deposit.”

The SEC says that Heart began promoting Hex tokens as an investment designed to make people “rich” in 2018. Using his companies, Hex, PulseChain, and PulseX, Heart is alleged to have attracted investment from investors, including those who owned other cryptos who were encouraged to “sacrifice” them (rather than “invest”) to receive Hex tokens.

It was claimed that investors could expect returns of up to 38%.

$12M LUXURY SPEND

Heart did not register the securities and, it is further alleged, he and PulseX used around $12 million of the funds invested to buy luxury goods, including sports cars, watches, and a 555-carat black diamond known as ‘The Enigma’ – reportedly the largest black diamond in the world.

“Heart called on investors to buy crypto asset securities in offerings that he failed to register. He then defrauded those investors by spending some of their crypto assets on exorbitant luxury goods,” said Eric Werner, Director of the Fort Worth Regional Office. “This action seeks to protect the investing public and hold Heart accountable for his actions.”

The SEC’s complaint has been filed in the U.S. District Court for the Eastern District of New York and investors in Hex, PulseChain, or PulseX are urged to submit a tip via the SEC’s website.

Latest News

Treasury hits BofA with $1.2B fine over money laundering violations
Treasury hits BofA with $1.2B fine over money laundering violations

“Today’s actions send a clear message that even the biggest financial institutions are not above the law,” said Treasury Secretary Scott Bessent.

The hidden cost of growing a firm without intention
The hidden cost of growing a firm without intention

To build a truly self-sustaining practice, enterprising advisors have to start with a vision of what they want to be – and accept the realities that come with building toward it.

Waverly, Apella buy $412M in RIA assets across Oregon, Northeast
Waverly, Apella buy $412M in RIA assets across Oregon, Northeast

Serial acquirers add a 35-year-old Oregon wealth manager and a New York practice focused on women navigating life transitions.

&Partners taps two UBS leaders to run its private wealth business
&Partners taps two UBS leaders to run its private wealth business

Mara Glassel and Julie Fox will co-lead the fast-growing hybrid RIA’s ultra-high-net-worth and private wealth businesses.

Citi sees Q3 profit jump as wealth unit books record $38B in net new assets
Citi sees Q3 profit jump as wealth unit books record $38B in net new assets

The banking giant's wealth arm extends its revenue streak as it pushes to exit consent orders weighing on growth since 2020.

SPONSORED Built on insurance experience to deliver on long-term promises

Knighthead Life entered the market with a competitive MYGA. A strong launch earned advisor confidence and paved the way for FIAs.

SPONSORED In the Age of AI, Trust Becomes the Advisor's Greatest Asset

As AI makes financial information more accessible than ever, Lana Hock explains why human judgment, trust, and empathy remain the qualities clients value most in a financial advisor