A federal judge has agreed to lift an asset freeze on brothers Shane and Sean Hvidzak for two limited purposes — selling digital assets and recovering real property.
The case, Securities and Exchange Commission vs. the Hvizdzaks and their business High Street Capital, has been ongoing in federal court since the middle of last year when the federal agency filed a civil complaint against Shane Hvizdzak, 32, of Bradford, and Sean Hvizdzak, 34, of St. Marys, alleging the two were operating a cryptocurrency hedge fund scheme.
The complaint alleged the two owned High Street Capital in Bradford, that they allegedly took money from investors, said it was being invested in digital assets, and fabricated statements saying the investments were earning huge returns.
However, the SEC said the brothers took in the neighborhood of $26 million from investors, put it in their personal accounts and then moved it outside the United States. Some of the funds were put in untraceable digital accounts, the SEC alleged.
The brothers’ assets were frozen
Now, at the request of some of the allegedly defrauded investors, U.S. District Judge W. Scott Hardy has lifted the asset freeze to allow the sale of digital assets.
According to the SEC, the Hvizdzaks’ had approximately 15 units of Bitcoin and 5,191 units of Litecoin. At the time of the asset freeze, the digital assets were worth approximately $371,000. At current market rates, the assets are worth about $1.3 million, read a defense request from Shane Hvizdzak’s attorney, Efrem Grail, to allow for the sale.
In an order dated Monday, the judge ordered the Hvizdzaks to take all necessary steps to sell off the digital assets. The proceeds of the sale will be either retained in an account subject to the court’s asset freeze, or be directed to the court clerk, the order read.
The second recent action in the case related to an alleged violation of the court’s asset freeze. According to a motion by the SEC, after the federal court froze the assets of the Hvizdzaks last June, Shane Hvizdzak transferred the property at 561 High St. in Bradford Township to a trust run by his father “in contravention of the court’s asset freeze.”
The SEC requested, and received, a temporary lifting of the asset freeze to allow the transfer of property back to Shane Hvizdzak, where it will remain under the court’s asset freeze until the final judgment in the case.
The parties in the case have been in negotiations toward a settlement, according to court documents.
