The U.S. Securities and Exchange Commission (SEC) has suspended its fraud lawsuit targeting Geosyn Mining after federal prosecutors filed criminal charges against the company’s CEO, Caleb Joseph Ward, and two former executives.

In a filing dated February 14, 2025, in a Texas federal court, the SEC stated it would pause its case, which was initiated in April 2024 following the voluntary surrender of Ward and former COO Jeremy George McNutt. Both executives had appeared in court a day before the SEC’s notice.

An unsealed FBI affidavit provided on February 10 detailed accusations against Ward, McNutt, and Geosyn’s past sales manager, Jared McNutt. Although Jared’s name didn’t appear in the SEC’s lawsuit, it alleged that all three defrauded clients by misappropriating funds meant for mining operations.

Lavish Spending and Fabricated Reports

Prosecutors claimed Geosyn assured customers they would buy and host Bitcoin mining rigs for a monthly fee, promising investors a share of the mined BTC. However, the company often failed to procure the equipment and used client funds for personal expenditures.

The affidavit reported that Ward and the McNutts indulged in lavish expenditures that included firearms, luxury watches, and extravagant trips, such as a family visit to Disney World and an upscale Miami business trip, where they charged significant costs to Geosyn’s corporate credit cards.

To hide their misconduct, the executives allegedly presented investors with falsified reports that suggested their mining operations were profitable. In reality, some early investors received Bitcoin purchased with money from newer clients, drawing similarities to a Ponzi scheme.

Furthermore, Ward and Jeremy McNutt are accused of defrauding around 64 investors, totalling approximately $5.6 million between November 2021 and December 2022, while failing to buy 400 out of the 1,400 promised mining rigs.

In an unexpected legal turn, the pair have recently responded to Judge Mark Pittman’s inquiry about how potential shifts under the new Trump administration’s crypto-friendly policies could affect the lawsuit, requesting a pause in the SEC’s case.

Key Takeaways

• The SEC’s case against Geosyn Mining is temporarily halted as criminal charges are pursued against former executives.
• Allegations include the misuse of investor funds for extravagant expenditures.
• The defense argues that potential policy changes under Trump could impact the SEC’s proceedings.