$5.9 Million Multilevel Marketing Scheme Operator Charged by CFTC

The U.S. Commodity Futures Trading Commission (CFTC) has announced a civil enforcement action against Francier Obando Pinillo, who conducted fraud via companies Solanofi, Solano Partners Ltd., and Solano Capital Investments. Pinillo is accused of orchestrating a fraudulent digital assets multilevel marketing scheme that defrauded at least 1,515 customers in the United States, resulting in losses of over $5.9 million. Among the victims were members of a Spanish church.

According to the CFTC complaint, Pinillo exploited his position as a church pastor to lure Spanish-speaking individuals with little to no experience in digital asset transactions or commodity interest trading. He falsely presented himself as the CEO of the Solanofi entities, which he claimed operated an automated trading system for leveraged staking of crypto assets that rewarded users through an interest pool. Pinillo promised risk-free investments and guaranteed profits of up to 34.9% compounded monthly.

Pinillo misled customers by providing access to an online dashboard that displayed fabricated account statements and profits. To expand his fraudulent scheme, he encouraged customers to refer friends and family by offering a 15% referral fee. However, there was no actual trading platform, no trading activities occurred, and no profits were generated. Instead, Pinillo misappropriated all the funds that customers transferred to him.

Pinillo omitted the disclosure of material facts to customers, including the non-existence of the staking trading platform, fabricated account statements, and the sham nature of the Solanofi entities. He also failed to inform customers that their so-called profits were not real and that their assets were being misappropriated. Payments made to earlier customers were actually derived from the funds of new customers, resembling a Ponzi scheme.