Your News Source for Fraud

22 July 2021 – The EZeeFRAUD Team have identified a critical gap in funding for tech startups — in particular, those that are related to crypto and blockchain. The gap is related to due diligence on those seeking to raise fund for these endeavors. There is a significant amount of fraud in these areas, and investors’ funds are being embezzled at an alarming rate. The problem is that investors do not have a reliable source to check the background credentials of those seeking to raise money.

I’m sure many of you will have seen documentaries on Hulu, HBO and Netflix that chronicled alleged fraud at Theranos and Fyre Festival. But fraud is not always perpetrated on a large scale. For example, Threat.Technology recently published a story about a company called “EZeeBUY” (also known as EZeeBUY Experiences, and EZeeRETAIL). The story focuses on an American expat in Japan named David Estrada, who raised funds for his startup from 9 co-founders (some of which were actually his friends) then embezzled all of the money. Turns out Estrada has a criminal record in the US, and a history of fraud and theft in the Tokyo community.

David Estrada’s EZeeBUY fraud was the genesis of EZeeFRAUD. The co-founders realized that there are few ways for investors to protect themselves from this kind of a scam. There is rampant fraud in the ICO/Blockchain world, where people with criminal backgrounds are using tech startups and ICO’s to defraud investors of millions of dollars.

  • Make sure you’re emotionally detached from the opportunity. Don’t let your rational mind be eclipsed by grand promises. Think carefully before you invest, and make sure you get a reality check.
  • Don’t rush in. Fraudsters often take advantage of FOMO (Fear of Missing Out) and pressure investors by saying they’ll miss out on big gains if they don’t act NOW. In startups and venture capital, there will always be another investment around the corner, so take your time and conduct thorough due diligence.
  • Always perform routine due diligence, even though it’s not exciting. In the David Estrada EZeeBUY fraud, for example, he solicited numerous investors from the Tokyo American Club where he was a member. Fortunately, his history of theft among that community was a red flag that scared off a number of members he approached for money. Always ask around, and verify the reputation of the founder of any startup.

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