The Argentine bitcoiner who goes by the pseudonym Osvaldo “Beto” Mendeleev published on Twitter, in the first week of this year, an investigation into the holding company Generación ZOE to support its accusation that it is all a huge Ponzi scheme.
Since the beginning of last year, the company has been raising money from thousands of Argentines guaranteeing a fixed income of 7.5% per month on the amount contributed. The gains would come from trading cryptocurrencies, forex and stocks, as well as a host of other businesses that are part of Generación ZOE, from pet shop to pizzeria.
Mendeleev’s effort to gather evidence showing signs of a pyramid reached the Argentine Securities and Exchange Commission (CVN), which, on January 7, opened an administrative process to investigate the companies Generación ZOE and Universidad del Trading, and the head of all operations: Leonardo Cositorto.
The NGO Bitcoin Argentina also entered the confrontation and sent the Attorney General’s Office (PROCELAC) on Wednesday (12) a official denunciation against Generación ZOE for crimes of fraud, unauthorized collective investment capture and market manipulation.
All this attention that ZOE has been getting came from Mendeleev’s investigation. in conversation with the Portal do Bitcoin, the bitcoiner told why he took it upon himself to unmask the company.
“They started asking me if I knew this Cositorto and his company Zoe (I didn’t know them), but I just had to go into his profile to find out what an amazing character he was and the masterstroke he was applying.”
The bitcoiner began to tweet every indication of fraud from the businessman he found, drawing the attention of an increasing number of people on social media.
“I thought, ‘Why don’t I do some good research collecting everything I find?’ It took me two hours to do this and then the investigation went viral. It’s a giant fraud right under our noses.”
Unmasking Generation ZOE
The bitcoiner began his series of tweets warning that the scheme is quite complex and that in order to understand it, it is necessary to pay attention to the details and especially to the contradictions.
There are two main characters behind Generación ZOE: Leonardo Nelson Cositorto, the “mandachuva” and CEO of the group’s companies; and Maximiliano Javier Batista, his right hand.
Mendeleev was able to track the subjects’ credit. He found, for example, that by the end of 2020, Cositorto had a high credit risk and had a long-term debt of 49,000 Argentine pesos (about R$2,500).
He managed to pay off the debts thanks to the emergency aid to alleviate the impacts of Covid-19, which he requested from the Argentine government in October of that year. “We got off to a bad start, a CEO who didn’t even have health insurance and even asked for the IFE (aid) in 2020,” joked Mendeleev.
After settling their situation with the banks, Cositorto and his partner founded seven companies in 2021. In March, they opened Generación Zoe — the holding company for all the other companies in the scheme — Universidad del Trading and Zoe Construcciones. In November, it was time to create Zoe Burger and Zoe Pets, adding Zoe Pizzas and Zoe Fitnes Gym in December.
As their names suggest, Zoe’s operations range from trading school to pet shop and pizzeria.
Where does the money come from?
Regardless of Cositorto’s entrepreneurial adventures, the main factor that raises suspicion of a coup is the promise of Generación ZOE to pay a fixed income of 7.5% per month to its investors. To explain where this money comes from, Mendeleev released a video in which a company representative tries to explain how they pay investors.
“The company gathers the money of all its investors worldwide and converts it into businesses that make it possible to generate money at all times, fully sustainable over time. These businesses generate between 25% and 35% and that is where the monthly 7.5% for each investor comes from”, explains the poster boy.
He describes that the revenue comes from the sale of online courses, educational workshops that the group promotes in Argentina, Colombia and Spain, and the supposed trade in cryptocurrencies, forex and shares, made through the Universidad del Trading.
the size of the blow
The only document open to the public available on the site da Generación ZOE informs that investors can invest from US$ 500 to US$ 50 thousand in the business, described as a trust fund with a three-year term.
Early withdrawal of money is possible after one year and with a fine of 50% of the amount contributed.
The report asked if Mendeleev would be able to estimate how much the businessman has already profited from the alleged coup. “I wouldn’t know how to calculate. They are all over the country, a lot more people are involved than it seems”, he points out.
Still, he ventures a conservative estimate: “By believing half of what they estimate they have as members and at the rate of $1,000 per person, we’re talking more than $50 million.”
While Zoe’s team guarantees that a return of 7.5% per month is entirely possible through their strategies, Mendeleev contextualizes that an American treasury bond, for example, yields 2% per year.
“Let’s add a little math to the subject. Thanks to compound interest, as mentioned in the Zoe Capital pamphlet, if you leave the capital paying and reinvest the profits, we’re talking 138% per year in dollars. A little too much without any risk, no?” he asked.
It draws attention, therefore, as a coach that was sunk in debt until 2020, is able to deliver so much profit to investors. The signs of a scam continue: at Christmas and other special dates, the company offers trading robots that, in just three months, make the investor’s money yield 100%.
To try to give legitimacy to the suspicious business, in December last year Leonardo Cositorto lied that he was about to obtain a license from regulators to operate as a legal agent on the Argentine stock exchange — information that was denied by CVN.
The bitcoiner also brings a series of evidence that raises suspicion about the entrepreneur’s activities, such as information that does not match the alleged gold backing of his Zoe Cash currency. For his construction company, Zoe Construcciones, Cositorto published a fraudulent ad in Clarín, one of Argentina’s largest newspapers.
Mendeleev speculates that the creation of so many companies from different areas form the network that the entrepreneur allegedly uses to launder the dirty money he diverts from investors.
He also showed how Cositorto uses strong propaganda to publicize his scheme and build a “good image” around himself. “He went through literally every TV channel and was featured by various characters on radio and television. The worst thing is that they give you space to expand the pyramid scheme on a larger scale, because if you don’t find new customers, you break the base of the pyramid,” he wrote.
like the Portal do Bitcoin has shown in the past, Cositorto has been a coach for over 20 years and a multilevel marketing specialist. In September of last year, the suspicions of the Argentine crypto community around the businessman gained strength when Zoe Cash, the “coaches’ cryptocurrency”, was launched, which the company claims – without ever having proven – to be backed by gold extracted from the mine. Jujuy in Argentina.
Even Binance was dragged into this story. Amid the attention that Zoe Capital is receiving, the brokerage’s Argentine team published on Thursday (13) a tweet to clarify that it has no relationship with the company.
That’s because Zoe was using the exchange’s logo in its promotional materials, simulating a kind of association with the exchange that doesn’t actually exist.
The defense of ZOE
Bombed by criticism, Cositorto defended himself on Monday (17) in a post on Twitter. The coach calls himself a “victim of a smear campaign”. “We had no complaints from our users and, on the contrary, we continued to grow and we are now 85,000 people across Latin America,” he wrote.
The fight to end ZOE companies
Mendeleev told the report that after his series of tweets, the CNV was the only Argentine government agency that showed an initiative to alert investors, but that other authorities have not yet taken any action. In fact, he believes that they will only act when the damage is already done.
“I know the authorities will wait for this to explode until it gets to the point where it has many victims. Unfortunately bureaucracy prevents them from acting before it harms people. Like all ponzis, sooner or later they won’t get more people to support the pyramid and everything will collapse,” he said.
He says that there, similarly to what happens in Brazil, investigations take time and, when completed, many have already lost money with the scheme. “The State is slow for everything, so is Justice, and sometimes, useless. Cositorto has Causes for fraud, bankruptcy, evasion and money laundering for 25 years, and continues as if nothing had happened”, he reveals.
In addition to Mendeleev, the NGO Bitcoin Argentina is also taking action to denounce the apparent Generación ZOE coup. In the 43-page complaint, the bitcoiner organization that has existed since 2013 claims the fraud is clear:
“There are enough elements for the justice to investigate and verify that, through coercive coaching, educational training and finances, those behind this business group committed a fraud known as a ponzi scheme or pyramid scheme”, says the NGO.
“This type of scam that we have been detecting in recent times causes very great damage, not only to those who deposit their funds and trust, but also to the ecosystem in general”, adds the group, which describes its mission as promoting the healthy development of the industry. crypto for Argentines.