A federal judge in New York has knocked out the RICO claims at the heart of a class-action suit tied to an alleged pastor-led crypto Ponzi scheme — but the case may not be over.
What the judge decided
U.S. District Judge Ronnie Abrams on Thursday dismissed the racketeering (RICO) allegations brought by investors, concluding that a provision of the Private Securities Litigation Reform Act of 1995 barred the claims because they were grounded in “predicate acts of securities fraud” that the court found not actionable. The plaintiffs have 30 days to file an amended complaint.
The alleged scheme
The lawsuit, filed in May and seeking at least $750 million in damages, centers on losses tied to EminiFX, a platform founded by Eddy Alexandre. Prosecutors say EminiFX marketed itself as a trading platform for digital assets and foreign currencies and promised investors — more than 25,000 people, according to prosecutors — that it could “double their money within five months” using secret technology. Alexandre is accused of raising roughly $248 million, much of it from members of his church and the Haitian community, while failing to invest a substantial portion of funds, hiding millions in losses, and diverting $14.7 million to his personal account. Authorities also said he purchased a $155,000 BMW with investor funds.
Criminal and regulatory fallout
Alexandre pleaded guilty to commodities fraud in 2023. At sentencing he was ordered to forfeit $248.9 million and to pay $213 million in restitution. The Bureau of Prisons lists him as being held at a low-security federal facility in Pennsylvania. Separately, a different federal judge last year ordered Alexandre and EminiFX to pay nearly $229 million in a CFTC enforcement action; Alexandre represented himself in that case.
Broader context
The ruling highlights a legal hurdle plaintiffs face when RICO claims are based on alleged securities fraud, and it comes amid growing scrutiny of crypto-related frauds involving trusted community leaders. Last year, a Colorado judge found a pastor, Eli Regalado, violated securities laws while raising funds for a failed crypto project he claimed was divinely inspired.
What’s next
Investors’ lawyers can try again: the court gave them 30 days to amend their complaint. How they alter their claims — and whether they can clear the legal bar the judge identified — will determine whether this civil fight continues alongside the significant criminal and regulatory judgments already entered against Alexandre.
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