A federal judge has tossed key RICO claims in a class-action over a pastor-led crypto Ponzi scheme, dealing a setback to investors seeking damages but leaving the door open for a revised complaint.
U.S. District Judge Ronnie Abrams in Manhattan rejected civil RICO allegations against a pastor affiliated with the Seventh-day Adventist Church and others, finding that the plaintiffs’ claims were built on “predicate acts of securities fraud” that—under a provision of the Private Securities Litigation Reform Act of 1995—were not actionable as pleaded. Civil RICO allows victims to sue for harm tied to racketeering activity such as fraud or extortion; Abrams gave the investors 30 days to file an amended complaint.
The May lawsuit sought at least $750 million in losses tied to EminiFX, a platform that marketed itself as a trading venue for digital assets and foreign exchange. Prosecutors say EminiFX founder and former CEO Eddy Alexandre—who pleaded guilty to commodities fraud in 2023—raised roughly $248 million from more than 25,000 investors by promising the platform could “double their money within five months” using secret technology. Authorities allege Alexandre failed to invest substantial portions of those funds, concealed millions in losses, diverted $14.7 million to his personal bank account (including a later purchase of a $155,000 BMW), and hid losses on some allocations before his 2022 arrest.
At sentencing, Alexandre was ordered to forfeit $248.9 million and pay $213 million in restitution. He is currently listed by the Bureau of Prisons as incarcerated at a low-security facility in Pennsylvania. Separately, a different federal judge last year ordered Alexandre and EminiFX to pay nearly $229 million in a Commodity Futures Trading Commission enforcement action; Alexandre represented himself in that case.
The decision also underscores a recurring theme in crypto fraud: faith and trust can be exploited. Regulators and courts have repeatedly confronted schemes led by religious figures, including a recent Colorado case in which a pastor was found to have violated securities laws after soliciting funds for a failed crypto project he said was divinely inspired.
Investors and litigants will now watch whether plaintiffs revise their RICO claims or pursue other legal avenues to recover losses from the EminiFX collapse.
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