PHOENIX — The Arizona investigator who first began tracking a prominent crypto fraud suspect is discussing the magnitude of the cases against him.
“I’m just getting flooded with emails and phone calls from investors,” said Corporation Commission Investigator Toni Brown, who retired from her 34-year career as a law enforcement officer in December. Brown, speaking last month to 12News, said she was receiving 50-100 emails a day from people around the world who claimed to be victims of Jeremie Sowerby’s schemes. She says Arizonans should be wary of similar fraudsters.
“Just the ease he was able to move from company to company, I have no doubt there are others out there doing the same thing,” Brown said.
Sowerby operated scams using MLM tactics
Sowerby - a Fountain Hills man who ran several crypto investment companies with accomplice Luis Ortega – was federally indicted for a third time last month. They are accused of creating fictitious crypto mining bots and fictitious cryptocurrency while attracting tens of millions of dollars from investors worldwide. Evidence from the Arizona Corporation Commission’s investigation and the FBI suggest there are at least 800-900 victims of Sowerby’s alleged crimes.
But that may be an underestimate.
As Brown notes, more alleged victims are coming forward daily.
“Sowerby’s schemes are operated like multi-level marketing. You bring in one person and that person is offered an incentive to bring in friends and family or other people they know,” Brown said.
Sowerby was associated with companies Dunamis Global Technologies, My Block Chain Life, and My Trader Coin, among others. Former friends say he learned multi-level marketing strategies more than a decade ago and and applied those skills to his crypto-based companies.
The Arizona Corporation Commission took civil action against Sowerby in 2022 before the feds’ investigations brought its first criminal indictment in September of 2023. Sowerby remains behind bars and has pleaded not guilty.
“A lot of people unfortunately believed his sales pitches,” said Mark Dinell, Securities Division Director at the ACC. Dinell oversees the department where Brown works, leading a staff of about 50 attorneys, accountants and investigators who pursue tips involving financial fraud.
“We brought a case involving two of his scams, obviously the U.S. Attorney’s Office has brought cases on different scams,” Dinell said.
RELATED: Arizona man allegedly used stacks of phony computers to get investments for cryptocurrency scam
Arizona case rivals Netflix documentary case
A new Netflix documentary released this week, Bitconned, recounts the New York “CentraTech” scam that was also fueled by the cryptocurrency hysteria. However, it appears Arizona’s version may be more wide-reaching. According to the Securities and Exchange Commission, the Centra scam raised upwards of $30 million from investors. According to one indictment against Sowerby, a digital wallet of Sowerby’s had collected more than $50 million alone.
Sowerby is accused of spending money of investors on properties, cars and vacations. He also bought prizes for top-performing recruiters, prosecutors allege.
Although Sowerby now faces civil and criminal repercussions, the odds are not typically favorable for victims to recoup all their money because financial fraud suspects spend lavishly, Dinell said.
“We’ll (the ACC) pursue what we can. They (the feds) will pursue what they can and hopefully we will get some money for all of the victims,” Dinell said.
“We have seen an explosion of numbers of investors”
Brown began following tips about Sowerby after he moved to Arizona from Canada for a second time several years ago. Brown says alleged victims of Sowerby include groups of professionals like attorneys and physicians, who networked with each other.
“The crypto universe was new, exciting. People wanted to jump on the bandwagon. We have seen an explosion of numbers of investors and huge dollar amounts,” Brown said.
Brown said Arizona historically has a national reputation for telemarketing scams and lax regulation of Limited Liability Corporations, or LLC’s.
“So I think those two factors make Arizona a haven for scam artists and it’s going to take legislation to get those laws changed,” Brown said. “The Securities and Exchange Commission is starting to crack down on these companies but they definitely have a long way to go.”
Dinell said he believes Arizona’s LLC laws are “not bad,” especially to some other states that “sell themselves on the basis you can hide behind LLC’s here.”
The ACC has new computer software to help investigators track fraud and a new federal transparency law goes into effect this year that will help investigators identify financial fraud.
“It’s something regulators are looking forward to because it will make it much harder for fraudulent LLC’s to hide their activities,” Dinell said. “That will give us and all investigators more ability to find out who is behind some of these scams.”
Potential investors should contact the ACC Securities Division
Dinell says the biggest obstacle to pursuing fraud suspects is getting victims to talk to authorities. Financial fraud victims are often embarrassed or unaware they may have a case.
Brown and Dinell encourage anyone considering an investment opportunity to contact the commission’s Securities Division first.
“We have an investigator on duty. They will check records to see if we have any information about them, to see if they are licensed to sell securities, and if there have been any previous actions against them,” Dinell said.
The ACC’s Securities Division can bring fraud cases before the Commission, the Superior Court, or refer cases for criminal prosecution to local and federal agencies.
“I will give scam artists credit. They are very ingenious to come up with ways to get your money,” Dinell said.
Brown wants ACC granted more authority to shut down LLC’s
Brown, who worked at the ACC for more than seven years, said she believes the state legislature could do more to prevent suspects like Sowerby from impacting so many people. Brown said the legislature should strengthen the ACC’s ability to crack down on fraudulent LLC’s.
The ACC is divided into two parts: the Corporation Division and the Securities Division.
“There is a complete separation between Securities Division and Corporations Division. Even if we go after a company and get a legal order for them to cease and desist, the Corporations Division does not shut that LLC down. They allow it to remain open and active unless it meets their criteria for closing.”
Brown said it is her understanding the Corporations Division is not mandated by law to take action “the way that they need to in some cases.”
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