The United States Securities and Exchange Commission (SEC) has taken legal action against Geosyn Mining and its co-founders, alleging a scheme to defraud investors out of $5.6 million. The lawsuit, filed on April 24 in a Fort Worth, Texas federal court, accuses Geosyn, CEO Caleb Joseph Ward, and former operating chief Jeremy George McNutt of deceiving approximately 64 investors between November 2021 and December 2022.

According to the SEC, the defendants misled investors through service agreements marketed as securities, falsely claiming to operate a certain number of cryptocurrency mining rigs while misappropriating customer funds for personal expenses. The agreements purportedly offered investors the opportunity to buy and operate crypto miners at favorable rates, but in reality, the SEC claims that Geosyn misrepresented its energy costs and failed to fulfill its promises.

The lawsuit further alleges that Geosyn misrepresented its mining operations, failing to purchase a significant portion of the mining rigs promised to investors and neglecting to bring most of the acquired machines online. Despite assurances that investors could select which cryptocurrencies to mine, the SEC asserts that Geosyn limited mining activities exclusively to Bitcoin.

To maintain the illusion of profitability, the SEC claims that Geosyn made Bitcoin payouts to investors using funds obtained through fraudulent means, including fabricated documents and inflated production rates. Additionally, the defendants allegedly misappropriated investor funds for personal use, funding extravagant expenses such as meals, vacations, and nightclub celebrations.

As Geosyn's financial troubles mounted, the SEC alleges that Ward and McNutt resorted to desperate measures, including fabricating IOU notes and threatening bankruptcy, all while withholding crucial information from investors. The SEC seeks permanent injunctions, restitution of misappropriated funds, and penalties against the defendants.

Despite these serious allegations, Geosyn, Ward, and McNutt have not yet responded to requests for comment, leaving investors and regulators alike awaiting further developments in this ongoing legal saga.