Denver Pastor Found Guilty of Defrauding Investors in $3M Crypto Scheme

A federal judge has ruled that Pastor Elijah Cozart is liable for defrauding investors in a $3 million cryptocurrency scheme. The judge determined that Cozart, the pastor of Saint John’s Church in Denver, misled investors regarding investments in a cryptocurrency hedge fund called “Klöv Coin.”

According to the court, Cozart promised investors substantial returns through the use of sophisticated cryptocurrency trading algorithms. However, Cozart allegedly used new investor funds to pay returns to older investors, which constitutes a Ponzi scheme.

The Securities and Exchange Commission (SEC) filed the original complaint in January 2023. The SEC alleged that Cozart raised at least $3.2 million from over 50 investors through unregistered investment offerings for “Klöv Coin”. The SEC also claimed that Cozart misappropriated a portion of the investor funds for personal expenses.

The federal judge has now concluded that Cozart violated federal securities antifraud laws. A sentencing date has not yet been set. Cozart faces the potential of significant civil penalties and disgorgement of ill-gotten gains.

This ruling serves as a caution to investors to exercise vigilance regarding cryptocurrency investment opportunities that sound too good to be true. Thorough research and an understanding of the associated risks are essential before investing funds in any novel or unregulated asset.