An investor in the alleged cryptocurrency hedge fund operated by local brothers Shane and Sean Hvizdzak has written to federal Judge Scott Hardy, decrying delays in the civil case that mean lengthy delays for investors hoping to get their money back.
In the letter dated Nov. 10, the investor, whose name was not disclosed, said all of the victims in the case have had “no access to our capital and no clear pathway for resolution.” The letter was made part of the docket in the civil case against the Hvizdzak brothers that was brought last year by the Securities and Exchange Commission.
The case alleges the Hvizdzak brothers 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 alleges the brothers took about $31 million from investors, put it in their personal accounts and then moved it outside the United States.
Sean Hvizdzak, 34, an attorney who lives in St. Marys, has maintained his innocence, while Shane Hvizdzak, 32, of Bradford, has claimed his Fifth Amendment right against self-incrimination through filings in the SEC case. The siblings are also facing a criminal case with the same allegations, and were granted a stay in the civil case until next year.
Detailing sleepless nights, panic attacks, stress and powerlessness, the investor wrote, “While we understand that the SEC and Attorney General are deploying tremendous resources both from a time and monetary perspective, the pace of proceedings is discouraging and frustrating.”
Until the civil and criminal actions against the Hvizdzaks are completed, investors “are unable to pursue any other meaningful legal action.”
Months go by without significant progress in the case, the investor wrote. The investors “have been living under the duress of not knowing whether our funds (and for some lifesavings) will ever be returned, Shane Hvizdzak continues to live a seemingly ‘normal’ life and Sean continues to practice law,” the letter stated.
The investors continue to feel victimized, the letter stated, as the Hvizdzaks have not been arrested and placed into holding and “continue to have their physical freedom while many of us have lost our financial freedom.”
The letter continued, alleging the brothers “have violated the court order by blatantly trying to transfer assets to their parents in an attempt to shield it from investors. This is not just intentional and brazen; I am sure others might deem this behavior to be beyond belief given the situation.”
The investor asked the judge to consider disbursing the funds that have been seized to date.
Also in the letter, the investor took issue with Shane Hvizdzak pleading the Fifth Amendment — his right against self incrimination — throughout the course of the investigation.
“It appears that he has done everything in his power to not only defraud us as investors prior to being caught, but wants to continue to victimize us by providing absolutely no information whatsoever about what occurred,” no information about the money that was taken and no assistance toward disbursing the money that has been seized.
“Given the state of the world over the past year and the pandemic we have all faced, this is vital for many of us to move forward in some capacity,” the letter stated.
A video status conference in the civil case is scheduled for 10 a.m. Jan. 25.
