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BRADFORD, Pa. Sean Hvizdzak is working with federal officials to come to a resolution on a fraud complaint by the Securities and Exchange Commission, while his brother Shane appears to be pleading the Fifth Amendment in some aspects regarding accounting matters in the case.

Shane Hvizdzak, 32, of Bradford, and Sean Hvizdzak, 34, of St. Marys, were both named in an SEC complaint in June for allegedly defrauding investors in a cryptocurrency hedge fund scheme. Both have asked for more time to respond in the case, as Friday had been set as the deadline for responses to the complaint.

The brothers allegedly took money from investors, said it was being invested in digital assets and fabricated statements saying the investments were earning huge returns, the SEC alleged.

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 SEC complaint which is a civil case, not a criminal case indicated that the brothers had investors from Pennsylvania, California and Florida.

Sean Hvizdzaks attorney, David Berardinelli of Pittsburgh, asked for an extension to Oct. 5. In his motion, the attorney said Sean Hvizdzak and the SEC have engaged in preliminary discussions about a possible non-litigated, amicable resolution to this action as to him. Due to the complexity of the issues, the discussions will not be completed this week, the attorney explained. The SEC was in agreement with the motion, he noted.

The motion was granted Wednesday by Judge Susan Paradise Baxter.

Contacted by The Era Wednesday, Berardinelli declined further comment.

As for Shane Hvizdzak, Hvizdzak Capital Management LLC, High Street Capital LLC and High Street Capital Partners LLC all represented by The Grail Law Firm of Pittsburgh attorney Efrem Grail is asking to move deadlines as well.

Grails motion noted that the court ordered a preliminary accounting on or before July 1, and for Hvizdzak to provide a final sworn accounting and asset repatriation by July 26.

He asked for the deadline on accounting and repatriation to be moved to Sept. 14, explaining in order to provide the information, Hvizdzak would need access to his business records, which are on a cellphone and laptop that have been seized by the SEC.

In the SECs response, the agencys attorney, Matthew Scarlato, stated Grail informed him that when able, they intended to invoke the Fifth Amendment in response to the preliminary accounting.

The Fifth Amendment is the right against self incrimination.

The response also noted that Grail was in discussions with the Department of Justice to establish parameters by which they could repatriate additional investor assets and provide at least some aspects of the sworn accounting despite Shanes intention to assert the Fifth Amendment.

Scarlato noted this would accomplish the critical goal of securing additional existing investor assets while this case is pending. He noted, too, that the SEC would not agree to an additional extension of time for Hvizdzak to comply with court orders, or to assert his Fifth Amendment rights.

This motion had not been ruled upon by Wednesday afternoon, according to the online docket.

Excerpt from:
Brothers ask for more time in SEC case - Olean Times Herald