Texas Judge Recommends Granting Motions to Dismiss in Leyva v. Bascai Cryptocurrency Scam Case

News | February 14, 2024 By:

On Tuesday, February 6, 2024, Magistrate Judge Susan Hightower of the United States District Court for the Western District of Texas issued an order and recommendation on several motions in the case of Leyva v. Bascai, Inc. Et Al.

The case involves a cryptocurrency scam that allegedly defrauded Carlos Leyva, a Texas resident and licensed Florida lawyer. According to court filings, Leyva was contacted in August 2023 by a woman named “Amy Li” who encouraged him to open an account on the website and begin trading. Li purportedly suggested Leyva open an account on a website advertising gold futures trading. Leyva stated that the website appeared legitimate and was linked to a major commodity exchange, though it was actually operating fraudulently.

Leyva alleges he deposited several transfers of money into his supposed trading account on the website after being encouraged by Li. Documents state the account eventually showed a balance of over $1 million, but when Leyva tried to withdraw funds, the website’s operator refused and claimed his activities violated the “User Agreement” he had never reviewed.

In his lawsuit, Leyva names California company Bascai Inc. and its landlord Chi Ping Chen Kao as defendants, alleging they were fronts for the criminal enterprise behind the fraudulent website. As evidence, Leyva points to the Facebook profile of an “Amy Li” listing employment at Bascai. However, Bascai denied any involvement in the scam or knowledge of an employee by that name.

In her ruling, Judge Hightower considered several motions in the case. She denied Leyva’s request for early discovery aimed at identifying more defendants, finding he did not demonstrate good cause. The judge also recommended granting motions to dismiss the claims against Bascai and Kao. For Bascai, she ruled the court lacks personal jurisdiction over the California company as Leyva provided no proof of its connection to the scam. Claims against Kao were recommended for dismissal as well, with the judge finding Leyva’s allegations against her were speculative and did not state valid legal claims.

The case highlights the ongoing issue of cryptocurrency and investment scams proliferating online. It also shows the challenges victims face in identifying responsible parties and entities to hold legally accountable for financial damages. The judge’s recommendations are pending approval from the presiding district court judge.

Please contact BlockTribune for access to a copy of this filing.