PHOENIX — Two Arizona residents have been indicted in federal court for allegedly scamming hundreds of people in a cryptocurrency scheme.
Luis Ortega, 42, of Litchfield Park, and Jeremie Sowerby, 45, of Fountain Hills are accused tricking people to invest in "risk-free" opportunities that promised to yield lavish gifts and profits, according to the U.S. Attorney's Office of Arizona.
The fraudulent investment opportunities involved purported Bitcoin mining machines located abroad and in Arizona, as well as a real estate company where investors could buy custom-built container houses by using a "Millenium" cryptocurrency.
Prosecutors said the entire scheme was based on lies and millions of dollars was lost.
The defendants allegedly targeted victims between 2017 and 2023. According to the FBI, the defendants are believed to be affiliated with the following entities: Now Mining, Millennium, Dunamis, Digital Mint, VIP Mining, My Blockchain Life, and BlockX.
The 55-count indictment filed against Ortega and Sowerby charges them with wire fraud and money laundering. If convicted on the charges, the defendants potentially face a lengthy prison sentence.
According to court records, Sowerby is accused of staging a massive crypto mining operation by displaying stacks of what appeared to be thousands of computer hard drives complete with blinking lights and fans attached to them.
Sowerby allegedly convinced investors these hard drives were running 24/7, mining the internet for cryptocurrency.
Investors leased or purchased the drives with promises of big profits.
In actuality, investigators say the so-called hard drives were empty plastic containers that Sowerby 3D-printed to look like computers.
A growing number of angry investors have weighed in on internet websites to tell their personal stories of being duped in Sowerby’s alleged schemes.
Sowerby is a Canadian citizen living in Arizona since 2017. He’s being held without bond.
Sowerby has also been the subject of an extensive investigation by the Securities Division of the Arizona Corporation Commission. A December 2022 civil filing by the Securities Division alleges Sowerby violated the Securities Act of Arizona. The filing proposed Sowerby cease and desist operations, and be subject to administrative penalties.
“The sales pitch was simple; invest in their cryptocurrency mining machines, receive new coins as rewards, and exchange these coins for a large profit. As it turned out, Respondents overpromised and never delivered, and investors have yet to receive a return on their investment,” the proposed order states.
Sowerby made a compelling presentation to investors, hosting in-person and virtual tours of the Tempe facility. Investors saw the stacks of phony computer hard drives and armed guards at the facility. They were told celebrities like Justin Bieber and Snoop Dogg were endorsers.
The Securities Division alleges Sowerby and associates offered investments in cryptocurrency mining machines under names of “KK Miners” and “BlockX.”
Those machines would mine tokens including Kannabiz Koinz, an alleged new cryptocurrency created by Sowerby. Investors could pay $6,000 to $7,000 for a physical miner and electricity costs. In reality, investors never received a physical mining machine. In addition, “Kannabiz Koinz” was not actually a tradable cryptocurrency, the Security Division alleges. As for “BlockX”, it “has no monetary value, and is not recognized anywhere as an acceptable form of currency,” the proposed order states.
Evidence suggests the alleged rouse was lucrative for Sowerby and his alleged co-conspirators.
“For investors paying in cryptocurrency, they were provided a cryptocurrency wallet ‘address’ to route their payment to KK Miners,” the proposed order states. “The wallet address to which investors sent their funds in turn sent the monies to a second wallet address that, as of the time of filing this Notice, has received the equivalent of over $57 million in cryptocurrency.”
12News has reached out to attorneys representing Sowerby and Ortega and has not yet received a response.
Anyone who believes they may have been victimized by the defendants can contact the FBI here.
Watch 12News+ for free
You can now watch 12News content anytime, anywhere thanks to the 12News+ app!
The free 12News+ app from 12News lets users stream live events — including daily newscasts like "Today in AZ" and "12 News" and our daily lifestyle program, "Arizona Midday"—on Roku and Amazon Fire TV.
12News+ showcases live video throughout the day for breaking news, local news, weather and even an occasional moment of Zen showcasing breathtaking sights from across Arizona.
Users can also watch on-demand videos of top stories, local politics, I-Team investigations, Arizona-specific features and vintage videos from the 12News archives.
Roku: Add the channel from the Roku store or by searching for "12 News KPNX."
Amazon Fire TV: Search for "12 News KPNX" to find the free 12News+ app to add to your account, or have the 12News+ app delivered directly to your Amazon Fire TV through Amazon.com or the Amazon app.
UP TO SPEED
Catch up on the latest news and stories on the 12News YouTube channel. Subscribe today.