Feds probing South Dakota brokers for cryptocurrency ‘Ponzi scheme’

FBI, IRS among agencies investigating alleged fraud of more than $10M by Sioux Falls-based Banaiah Holdings

(Screenshot courtesy of benaiahco.com)

A Sioux Falls hedge fund accused of bilking millions from investors in a cryptocurrency scheme is the subject of a multi-state criminal investigation being led by the FBI.

And earlier this month a federal judge presiding over an open civil case against Benaiah Holdings — and its principal officers, Benjamin Wiener and Christopher Hmielewski — froze the company’s assets after finding merit in allegations it committed fraud with the allure of digital currency.

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“The court has reviewed the facts and information provided to it and has determined that plaintiff has presented evidence of a potential fraud, that there is imminent danger of further dissipation of assets, and that Benjamin Wiener (“Wiener”) engaged in deceptive and misleading statements,” Federal District Court Judge Camela Theeler wrote in an Aug. 15 ruling that ordered the confiscation of Benaiah’s assets.