Catherina De Solieux was looking forward to a comfortable retirement. She had finished working as a nurse, was paying off her mortgage on a property in regional Victoria and had savings in the bank.
Friends she met through a network marketing group had introduced her to an investment opportunity called HyperFund and she planned to use the returns as a source of retirement income. After initially putting in small amounts, she tipped in $80,000.
While De Solieux was initially able to make withdrawals – of about $10,000 – within months, the rest was gone.
“I lost my house,” she says, three years later. “I lost all my money. I couldn’t pay the mortgage. I owed a lot of debts when I did actually sell the house and pay the rest of the mortgage off – by that time I didn’t have much left.”
De Solieux, now 71, says she lives on a pension, which covers not much more than her rent.
“Now I haven’t got five cents in the bank or in my pocket. I can’t go to the dentist. I can’t get my car serviced properly.
“It just goes on and on. I can’t even get my [hearing] checked out. I’ve had friends deliver food packages on the doorstep. I have got nothing left.”
The experience left De Solieux depressed and suicidal.
“I got terribly, terribly depressed and I wanted to commit suicide. It’s a terrible thing to admit to anyone, but that’s how I felt.
“I still get up every morning and I sob, every single morning since that happened, I just can’t get up without not forgiving myself and wanting to beat myself up.”
De Solieux is one of several Australians who lost money to the HyperVerse scheme who are joining a legal bid to recover lost money from the banks that oversaw transfers to the project.
A specialist investment fraud law firm based in the UK, Wealth Recovery Solicitors, will take on De Solieux’s case as one of the Australians who transferred funds to a crypto exchange to become a HyperFund member (the scheme was later rebranded as HyperVerse).
She joins more than 100 people in the UK preparing to take legal action to recover funds. WRS says it has successfully settled five HyperVerse cases in the past month, with an average value of ￡40,000 (A$77,163).
It says it has a further￡6m (A$11.6m) in active claims under way.
The move comes after the firm settled a $1m claim against National Australia Bank this month for money lost through a different, unrelated investment scheme.
A Guardian Australia investigation revealed widespread losses to the HyperVerse scheme, which was launched in December 2021 in an online promotional video featuring a fake chief executive officer, Steven Reece Lewis, alongside appearances by the Australian blockchain entrepreneur Sam Lee and his business partner Ryan Xu.
Lee has recently been charged with conspiracy to commit fraud in the US for his alleged role in HyperVerse, described in court documents as a “pyramid and Ponzi scheme” alleged to have defrauded investors of US$1.89bn (A$2.86bn).
Josh Chinn, a solicitor, says WRS has undertaken a trace of HyperVerse funds and an associated exchange, HOO.com. It claims to have found that a group of HyperVerse accounts had received close to US$300m (A$458) on the Tron exchange alone, with 96% of these funds being sent to HOO.com. The firm says it has traced at least US$2.7bn sent to HOO.com, which it claims had links to “between 50 and 100 known scam entities”.
HOO.com, which stands for Hyper Optimum Organization, collapsed in 2022. Guardian Australia has been unable to put questions to HOO.com whose website no longer exists.
Chinn says the crypto tracing work is necessary to prove to the banks that customers have been defrauded.
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“We firstly have to get over the hurdle of proving it’s a scam,” Chinn tells Guardian Australia. “When it comes to [alleged] cryptocurrency scams, we’ve got to basically prove that the [alleged] victims don’t have the funds any more, so we have in-house technology where we can trace cryptocurrency.
“We are gathering together a general exhibit just to get over that first hurdle of proving it’s a scam, what happened, and why the victims believed it was a genuine investment.”
Chinn says banks have an obligation under signed codes of conduct to detect any unusual activity among customers, which should trigger protective action to ensure customers do not lose funds.
This will form the basis of claims against the banks, which can be settled in liaison with the financial ombudsman without the need for litigation – which is complex, expensive and difficult. Even in the event of a successful class action, he says, a court order is unlikely to result in the recovery of funds.
“You may get a piece of paper in court that says, ‘Yep that’s your money, you have proven that’s yours,’ but, at the end of the day if the third party involved, the exchange, hasn’t got those funds within their remit any more, you basically have got a piece of paper that’s worthless.”
De Solieux says she is pleased she can now attempt to recover her lost funds.
“Look, it may or may not work,” she says. “Yes, if I get my money back, that would be wonderful. But if I don’t, I have to learn to live with it.”
More importantly, she says, she hopes that Lee and Xu are held to account for the losses.
“I’ve got to say that that’s one of the things that I really care a lot about … the whole concept of justice, and people who are in these schemes they need to be brought to justice, they really do.”
Lee has denied being behind HyperVerse, saying his involvement was limited to technology provision and the funds management side of the organisation.
He did not respond to questions from Guardian Australia before the publication of a previous article about his involvement in the establishment and operation of HyperFund and HyperVerse, but has previously denied the schemes are a scam.
In a WhatsApp message after the article was published he alleged it included “misstatements” about his role in running the Hyper schemes but did not respond when asked what they were. He also claimed that “people on the internet continues [sic] to make things up”.
Guardian Australia has been unable to make contact with Xu for comment.
